Rule2022-16472
Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Policy Changes and Fiscal Year 2023 Rates; Quality Programs and Medicare Promoting Interoperability Program Requirements for Eligible Hospitals and Critical Access Hospitals; Costs Incurred for Qualified and Non-Qualified DeferredCompensation Plans; and Changes to Hospital and Critical Access Hospital Conditions of Participation
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
August 10, 2022
Effective
October 1, 2022
Issuing agencies
Health and Human Services DepartmentCenters for Medicare & Medicaid Services
Abstract
This final rule will: revise the Medicare hospital inpatient prospective payment systems (IPPS) for operating and capital-related costs of acute care hospitals; make changes relating to Medicare graduate medical education (GME) for teaching hospitals; update the payment policies and the annual payment rates for the Medicare prospective payment system (PPS) for inpatient hospital services provided by long-term care hospitals (LTCHs). In addition it will establish new requirements and revise existing requirements for eligible hospitals and critical access hospitals (CAHs) participating in the Medicare Promoting Interoperability Program; and update policies for the Hospital Readmissions Reduction Program, Hospital Inpatient Quality Reporting (IQR) Program, Hospital VBP Program, Hospital- Acquired Condition (HAC) Reduction Program, PPS-Exempt Cancer Hospital Reporting (PCHQR) Program, and the Long-Term Care Hospital Quality Reporting Program (LTCH QRP). It will also revise the hospital and critical access hospital (CAH) conditions of participation (CoPs) for infection prevention and control and antibiotic stewardship programs; and codify and clarify policies related to the costs incurred for qualified and non-qualified deferred compensation plans. Lastly, this final rule will provide updates on the Rural Community Hospital Demonstration Program and the Frontier Community Health Integration Project.
Full Text
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[Federal Register Volume 87, Number 153 (Wednesday, August 10, 2022)]
[Rules and Regulations]
[Pages 48780-49499]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-16472]
[[Page 48779]]
Vol. 87
Wednesday,
No. 153
August 10, 2022
Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 412, 413, et al.
Medicare Program; Hospital Inpatient Prospective Payment Systems for
Acute Care Hospitals and the Long Term Care Hospital Prospective
Payment System and Policy Changes and Fiscal Year 2023 Rates; Quality
Programs and Medicare Promoting Interoperability Program Requirements
for Eligible Hospitals and Critical Access Hospitals; Costs Incurred
for Qualified and Non-qualified Deferred Compensation Plans; and
Changes to Hospital and Critical Access Hospital Conditions of
Participation; Final Rule
Federal Register / Vol. 87 , No. 153 / Wednesday, August 10, 2022 /
Rules and Regulations
[[Page 48780]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 412, 413, 482, 485, and 495
[CMS-1771-F]
RIN 0938-AU84
Medicare Program; Hospital Inpatient Prospective Payment Systems
for Acute Care Hospitals and the Long-Term Care Hospital Prospective
Payment System and Policy Changes and Fiscal Year 2023 Rates; Quality
Programs and Medicare Promoting Interoperability Program Requirements
for Eligible Hospitals and Critical Access Hospitals; Costs Incurred
for Qualified and Non-Qualified Deferred Compensation Plans; and
Changes to Hospital and Critical Access Hospital Conditions of
Participation
AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of
Health and Human Services (HHS).
ACTION: Final rule.
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SUMMARY: This final rule will: revise the Medicare hospital inpatient
prospective payment systems (IPPS) for operating and capital-related
costs of acute care hospitals; make changes relating to Medicare
graduate medical education (GME) for teaching hospitals; update the
payment policies and the annual payment rates for the Medicare
prospective payment system (PPS) for inpatient hospital services
provided by long-term care hospitals (LTCHs). In addition it will
establish new requirements and revise existing requirements for
eligible hospitals and critical access hospitals (CAHs) participating
in the Medicare Promoting Interoperability Program; and update policies
for the Hospital Readmissions Reduction Program, Hospital Inpatient
Quality Reporting (IQR) Program, Hospital VBP Program, Hospital-
Acquired Condition (HAC) Reduction Program, PPS-Exempt Cancer Hospital
Reporting (PCHQR) Program, and the Long-Term Care Hospital Quality
Reporting Program (LTCH QRP). It will also revise the hospital and
critical access hospital (CAH) conditions of participation (CoPs) for
infection prevention and control and antibiotic stewardship programs;
and codify and clarify policies related to the costs incurred for
qualified and non-qualified deferred compensation plans. Lastly, this
final rule will provide updates on the Rural Community Hospital
Demonstration Program and the Frontier Community Health Integration
Project.
DATES: This final rule is effective October 1, 2022.
FOR FURTHER INFORMATION CONTACT: Donald Thompson, and Michele Hudson,
(410) 786-4487 or <a href="/cdn-cgi/l/email-protection#2d696c6e6d4e405e0345455e034a425b"><span class="__cf_email__" data-cfemail="6622272526050b15480e0e1548010910">[email protected]</span></a>, Operating Prospective Payment, MS-
DRG Relative Weights, Wage Index, Hospital Geographic
Reclassifications, Graduate Medical Education, Capital Prospective
Payment, Excluded Hospitals, Medicare Disproportionate Share Hospital
(DSH) Payment Adjustment, Sole Community Hospitals (SCHs), Medicare-
Dependent Small Rural Hospital (MDH) Program, Low-Volume Hospital
Payment Adjustment, and Critical Access Hospital (CAH) Issues.
Emily Lipkin, and Jim Mildenberger, <a href="/cdn-cgi/l/email-protection#c98d888a89aaa4bae7a1a1bae7aea6bf"><span class="__cf_email__" data-cfemail="e2a6a3a1a2818f91cc8a8a91cc858d94">[email protected]</span></a>, Long-Term Care
Hospital Prospective Payment System and MS-LTC-DRG Relative Weights
Issues.
Adina Hersko, <a href="/cdn-cgi/l/email-protection#ffbe9b96919ed1b79a8d8c9490bf9c928cd197978cd1989089"><span class="__cf_email__" data-cfemail="6e2f0a07000f40260b1c1d05012e0d031d4006061d40090118">[email protected]</span></a>, New Technology Add-On
Payments and New COVID-19 Treatments Add-on Payments Issues.
Mady Hue, <a href="/cdn-cgi/l/email-protection#dfb2beadb6b3aaf1b7aaba9fbcb2acf1b7b7acf1b8b0a9"><span class="__cf_email__" data-cfemail="701d1102191c055e18051530131d035e1818035e171f06">[email protected]</span></a>, and Andrea Hazeley,
<a href="/cdn-cgi/l/email-protection#57363933253236793f362d323b322e17343a24793f3f2479303821"><span class="__cf_email__" data-cfemail="1879767c6a7d79367079627d747d61587b756b3670706b367f776e">[email protected]</span></a>, MS-DRG Classifications Issues.
Siddhartha Mazumdar, siddhartha.mazumdar @cms.hhs,gov, Rural
Community Hospital Demonstration Program Issues.
Jeris Smith, <a href="/cdn-cgi/l/email-protection#c8a2adbaa1bbe6bba5a1bca088aba5bbe6a0a0bbe6afa7be"><span class="__cf_email__" data-cfemail="d4beb1a6bda7faa7b9bda0bc94b7b9a7fabcbca7fab3bba2">[email protected]</span></a>, Frontier Community Health
Integration Project Demonstration Issues.
Sophia Chan, <a href="/cdn-cgi/l/email-protection#4a39253a22232b6429222b240a29273964222239642d253c"><span class="__cf_email__" data-cfemail="becdd1ced6d7df90ddd6dfd0feddd3cd90d6d6cd90d9d1c8">[email protected]</span></a>, Hospital Readmissions
Reduction Program--Administration Issues.
Tyson Nakashima, <a href="/cdn-cgi/l/email-protection#015578726e6f2f4f606a607269686c6041626c722f6969722f666e77"><span class="__cf_email__" data-cfemail="34604d475b5a1a7a555f55475c5d5955745759471a5c5c471a535b42">[email protected]</span></a>, Hospital Readmissions
Reduction Program--Measures Issues.
Jennifer Tate, <a href="/cdn-cgi/l/email-protection#f298979c9c9b949780dc86938697b2919f81dc9a9a81dc959d84"><span class="__cf_email__" data-cfemail="e18b848f8f88878493cf95809584a1828c92cf898992cf868e97">[email protected]</span></a>, Hospital-Acquired
Condition Reduction Program--Administration Issues
Yuling Li, <a href="/cdn-cgi/l/email-protection#0b727e6762656c2567624b68667825636378256c647d"><span class="__cf_email__" data-cfemail="d6afa3babfb8b1f8babf96b5bba5f8bebea5f8b1b9a0">[email protected]</span></a>, Hospital-Acquired Condition
Reduction Program--Measures Issues.
Julia Venanzi, <a href="/cdn-cgi/l/email-protection#670d120b0e064911020906091d0e27040a14490f0f1449000811"><span class="__cf_email__" data-cfemail="a3c9d6cfcac28dd5c6cdc2cdd9cae3c0ced08dcbcbd08dc4ccd5">[email protected]</span></a>, Hospital Inpatient
Quality Reporting Program and Hospital Value-Based Purchasing Program--
Administration Issues
Melissa Hager, <a href="/cdn-cgi/l/email-protection#bcd1d9d0d5cfcfdd92d4dddbd9cefcdfd1cf92d4d4cf92dbd3ca"><span class="__cf_email__" data-cfemail="97faf2fbfee4e4f6b9fff6f0f2e5d7f4fae4b9ffffe4b9f0f8e1">[email protected]</span></a> and Ngozi Uzokwe,
<a href="/cdn-cgi/l/email-protection#2e4049415447005b544145594b6e4d435d0046465d00494158"><span class="__cf_email__" data-cfemail="5d333a32273473282732362a381d3e302e7335352e733a322b">[email protected]</span></a>--Hospital Inpatient Quality Reporting Program
and Hospital Value-Based Purchasing Program--Measures Issues Except
Hospital Consumer Assessment of Healthcare Providers and Systems
Issues.
Elizabeth Goldstein, <a href="/cdn-cgi/l/email-protection#73161f1a09121116071b5d141c1f170007161a1d33101e005d1b1b005d141c05"><span class="__cf_email__" data-cfemail="dcb9b0b5a6bdbeb9a8b4f2bbb3b0b8afa8b9b5b29cbfb1aff2b4b4aff2bbb3aa">[email protected]</span></a>, Hospital
Inpatient Quality Reporting and Hospital Value-Based Purchasing--
Hospital Consumer Assessment of Healthcare Providers and Systems
Measures Issues.
Ora Dawedeit, <a href="/cdn-cgi/l/email-protection#b9d6cbd897ddd8cedcdddcd0cdf9dad4ca97d1d1ca97ded6cf"><span class="__cf_email__" data-cfemail="ed829f8cc3898c9a8889888499ad8e809ec385859ec38a829b">[email protected]</span></a>, PPS-Exempt Cancer Hospital
Quality Reporting--Administration Issues.
Leah Domino, <a href="/cdn-cgi/l/email-protection#177b72767f3973787a7e797857747a64397f7f6439707861"><span class="__cf_email__" data-cfemail="7b171e1a13551f14161215143b18160855131308551c140d">[email protected]</span></a>, PPS-Exempt Cancer Hospital
Quality Reporting Program-Measure Issues
Ariel Cress, <a href="/cdn-cgi/l/email-protection#93f2e1faf6ffbdf0e1f6e0e0d3f0fee0bdfbfbe0bdf4fce5"><span class="__cf_email__" data-cfemail="0362716a666f2d607166707043606e702d6b6b702d646c75">[email protected]</span></a>, Long-Term Care Hospital
Quality Reporting Program--Data Reporting Issues.
Elizabeth Holland, <a href="/cdn-cgi/l/email-protection#1570797c6f747770617d3b7d7a7979747b71557678663b7d7d663b727a63"><span class="__cf_email__" data-cfemail="dcb9b0b5a6bdbeb9a8b4f2b4b3b0b0bdb2b89cbfb1aff2b4b4aff2bbb3aa">[email protected]</span></a>, Medicare
Promoting Interoperability Program.
Dawn Linn, <a href="/cdn-cgi/l/email-protection#741015031a5a181d1a1a341719075a1c1c075a131b02"><span class="__cf_email__" data-cfemail="dfbbbea8b1f1b3b6b1b19fbcb2acf1b7b7acf1b8b0a9">[email protected]</span></a>, Lela Strong,
<a href="/cdn-cgi/l/email-protection#91fdf4fdf0bfe2e5e3fefff6d1f2fce2bff9f9e2bff6fee7"><span class="__cf_email__" data-cfemail="2c4049404d025f585e43424b6c4f415f0244445f024b435a">[email protected]</span></a>, and Alpha Wilson, <a href="/cdn-cgi/l/email-protection#0e6f627e666f207967627d61604e6d637d2066667d20696178"><span class="__cf_email__" data-cfemail="e1808d918980cf96888d928e8fa1828c92cf898992cf868e97">[email protected]</span></a>,
Conditions of Participation (CoP) Requirements for Hospitals and
Critical Access Hospitals (CAHs) to Continue Reporting Data for COVID-
19 and Influenza After the PHE ends as Determined by the Secretary.
SUPPLEMENTARY INFORMATION:
Tables Available Through the internet on the CMS website
The IPPS tables for this fiscal year (FY) 2023 final rule are
available through the internet on the CMS website at <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index</a>.html. Click on the link on the left side of the
screen titled ``FY 2023 IPPS Final rule Home Page'' or ``Acute
Inpatient--Files for Download.'' The LTCH PPS tables for this FY 2023
final rule are available through the internet on the CMS website at
<a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/LongTermCareHospitalPPS/index.html">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/LongTermCareHospitalPPS/index.html</a> under the list item for Regulation
Number CMS-1771-F. For further details on the contents of the tables
referenced in this final rule, we refer readers to section VI. of the
Addendum to this FY 2023 IPPS/LTCH PPS final rule.
Readers who experience any problems accessing any of the tables
that are posted on the CMS websites, as previously identified, should
contact Michael Treitel, <a href="/cdn-cgi/l/email-protection#c783868487a4aab4e9afafb4e9a0a8b1"><span class="__cf_email__" data-cfemail="d89c999b98bbb5abf6b0b0abf6bfb7ae">[email protected]</span></a>.
Table of Contents
I. Executive Summary and Background
A. Executive Summary
B. Background Summary
C. Summary of Provisions of Recent Legislation Implemented in
This Final Rule
[[Page 48781]]
D. Issuance of Proposed Rulemaking
E. Advancing Health Information Exchange
F. Use of FY 2021 Data and Methodology Modifications for the FY
2023 IPPS and LTCH PPS Ratesetting
II. Changes to Medicare Severity Diagnosis-Related Group (MS-DRG)
Classifications and Relative Weights
A. Background
B. Adoption of the MS-DRGs and MS-DRG Reclassifications
C. FY 2023 MS-DRG Documentation and Coding Adjustment
D. Changes to Specific MS-DRG Classifications
E. Recalibration of the FY 2023 MS-DRG Relative Weights
F. Add-On Payments for New Services and Technologies for FY 2023
III. Changes to the Hospital Wage Index for Acute Care Hospitals
A. Background
B. Worksheet S-3 Wage Data for the FY 2022 Wage Index
C. Verification of Worksheet S-3 Wage Data
D. Method for Computing the FY 2022 Unadjusted Wage Index
E. Occupational Mix Adjustment to the FY 2023 Wage Index
F. Analysis and Implementation of the Occupational Mix
Adjustment and the FY 2023 Occupational Mix Adjusted Wage Index
G. Application of the Rural Floor, Application of the State
Frontier Floor, and Continuation of the Low Wage Index Hospital
Policy, and Budget Neutrality Adjustment
H. FY 2023 Wage Index Tables
I. Revisions to the Wage Index Based on Hospital Redesignations
and Reclassifications
J. Out-Migration Adjustment Based on Commuting Patterns of
Hospital Employees
K. Reclassification From Urban to Rural Under Section
1886(d)(8)(E) of the Act Implemented at 42 CFR 412.103
L. Process for Requests for Wage Index Data Corrections
M. Labor-Related Share for the FY 2023 Wage Index
IV. Payment Adjustment for Medicare Disproportionate Share Hospitals
(DSHs) for FY 2023 (Sec. 412.106)
A. General Discussion
B. Eligibility for Empirically Justified Medicare DSH Payments
and Uncompensated Care Payments
C. Empirically Justified Medicare DSH Payments
D. Uncompensated Care Payments
E. Supplemental Payment for Indian Health Service and Tribal
Hospitals and Puerto Rico Hospitals for FY 2023 and Subsequent
Fiscal Years
F. Counting Days Associated With Section 1115 Demonstrations in
the Medicaid Fraction
V. Other Decisions and Changes to the IPPS for Operating Costs
A. Changes in the Inpatient Hospital Updates for FY 2022 (Sec.
412.64(d))
B. Rural Referral Centers (RRCs)--Annual Updates to Case-Mix
Index (CMI) and Discharge Criteria (Sec. 412.96)
C. Payment Adjustment for Low-Volume Hospitals (Sec. 412.101)
D. Changes in the Medicare-Dependent, Small Rural Hospital (MDH)
Program (Sec. 412.108)
E. Indirect Medical Education (IME) Payment Adjustment Factor
(Sec. 412.105)
F. Payment for Indirect and Direct Graduate Medical Education
Costs (Sec. Sec. 412.105 and 413.75 Through 413.83)
G. Payment Adjustment for Certain Clinical Trial and Expanded
Access Use Immunotherapy Cases (Sec. Sec. 412.85 and 412.312)
H. Hospital Readmissions Reduction Program: Updates and Changes
(Sec. Sec. 412.150 Through 412.154)
I. Hospital Value-Based Purchasing (VBP) Program: Policy Changes
J. Hospital-Acquired Conditions (HAC) Reduction Program: Updates
and Changes (Sec. 412.170)
K. Rural Community Hospital Demonstration Program
VI. Changes to the IPPS for Capital-Related Costs
A. Overview
B. Additional Provisions
C. Annual Update for FY 2023
VII. Changes for Hospitals Excluded From the IPPS
A. Rate-of-Increase in Payments to Excluded Hospitals for FY
2023
B. Critical Access Hospitals (CAHs)
VIII. Changes to the Long-Term Care Hospital Prospective Payment
System (LTCH PPS) for FY 2023
A. Background of the LTCH PPS
B. Medicare Severity Long-Term Care Diagnosis-Related Group (MS-
LTC-DRG) Classifications and Relative Weights for FY 2023
C. Changes to the LTCH PPS Payment Rates and Other Changes to
the LTCH PPS for FY 2023
IX. Quality Data Reporting Requirements for Specific Providers and
Suppliers
A. Assessment of the Impact of Climate Change and Health Equity
B. Overarching Principles for Measuring Healthcare Quality
Disparities Across CMS Quality Programs--Request for Information
C. Continuing To Advance to Digital Quality Measurement and the
Use of Fast Healthcare Interoperability Resources (FHIR) in Hospital
Quality Programs--Request for Information
D. Advancing the Trusted Exchange Framework and Common
Agreement--Request for Information
E. Hospital Inpatient Quality Reporting (IQR) Program
F. PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program
G. Long-Term Care Hospital Quality Reporting Program (LTCH QRP)
H. Changes to the Medicare Promoting Interoperability Program
X. Changes for Hospitals and Other Providers and Suppliers
A. Codification of the Costs Incurred for Qualified and Non-
Qualified Deferred Compensation Plans
B. Condition of Participation (CoP) Requirements for Hospitals
and CAHs To Continue Reporting Data for COVID-19 and Influenza After
the PHE Ends as Determined by the Secretary
C. Request for Public Comments on IPPS Payment Adjustment for
N95 Respirators That Are Wholly Domestically Made
XI. MedPAC Recommendations
XII. Other Required Information
A. Publicly Available Files
B. Collection of Information Requirements
I. Executive Summary and Background
A. Executive Summary
1. Purpose and Legal Authority
This FY 2023 IPPS/LTCH PPS final rule makes payment and policy
changes under the Medicare inpatient prospective payment systems (IPPS)
for operating and capital-related costs of acute care hospitals as well
as for certain hospitals and hospital units excluded from the IPPS. In
addition, it makes payment and policy changes for inpatient hospital
services provided by long-term care hospitals (LTCHs) under the long-
term care hospital prospective payment system (LTCH PPS). This final
rule also makes policy changes to programs associated with Medicare
IPPS hospitals, IPPS-excluded hospitals, and LTCHs. In this FY 2023
final rule, we are implementing a permanent policy to cap wage index
decreases as well as continuing policies to address wage index
disparities impacting low wage index hospitals. We also are making
changes relating to Medicare graduate medical education (GME) for
teaching hospitals and new technology add-on payments.
We are establishing new requirements and revising existing
requirements for eligible hospitals and CAHs participating in the
Medicare Promoting Interoperability Program.
This final rule also acknowledges feedback we received on requests
for information on health impacts due to climate change, on overarching
principles in measuring healthcare quality disparities in hospital
quality programs and value-based purchasing programs, the LTCH QRP, and
on advancing the Trusted Exchange Framework and Common Agreement
(TEFCA). We thank commenters for their feedback.
Additionally, due to the impact of the COVID-19 PHE on measure data
used in the Hospital VBP Program and HAC Reduction Program, we are
finalizing our proposals to suppress several measures in both of those
programs for purposes of FY 2023 scoring and payment adjustments. For
transparency, we will continue to publicly report measure information
for all measures, including suppressed measures. In addition to these
measure suppressions
[[Page 48782]]
for the Hospital VBP Program, we are finalizing our proposal to
implement a special scoring methodology for FY 2023 that results in
each hospital receiving a value-based incentive payment amount that
matches their 2 percent reduction to the base operating MS-DRG payment
amount. Similarly, we are finalizing our proposal to suppress all six
measures in the HAC Reduction Program for the FY 2023 program year. We
are not finalizing our proposal to not calculate measure results or
scores for the CMS PSI 90 measure. Although we will not calculate or
report the CMS PSI 90 measure results for use in the HAC Reduction
Program scoring calculations for the program year, we will still
calculate and report CMS PSI 90 that is displayed on the main pages of
the Care Compare tool hosted by HHS after confidentially reporting
these results to hospitals via hospital-specific reports and a 30-day
preview period. Additionally, we will continue to calculate and report
measure results for the NHSN CDC HAI measures. For the FY 2023 program
year, hospitals participating in the HAC Reduction Program will not be
given a Total HAC score, nor will hospitals receive a payment penalty.
We are also providing estimated and newly established performance
standards for the Hospital VBP Program. For the Hospital Readmissions
Reduction Program, we are resuming the use of the one measure (which
was previously suppressed for the FY 2023 applicable period) for the FY
2024 applicable period, and incorporating measure updates to the six
condition/procedure measures addressed by the Hospital Readmission
Reduction Program to account for patient history of COVID-19.
Under various statutory authorities, we either discuss continued
program implementation or make changes to the Medicare IPPS, the LTCH
PPS, other related payment methodologies and programs for FY 2023 and
subsequent fiscal years, and other policies and provisions included in
this rule. These statutory authorities include, but are not limited to,
the following:
<bullet> Section 1886(d) of the Social Security Act (the Act),
which sets forth a system of payment for the operating costs of acute
care hospital inpatient stays under Medicare Part A (Hospital
Insurance) based on prospectively set rates. Section 1886(g) of the Act
requires that, instead of paying for capital-related costs of inpatient
hospital services on a reasonable cost basis, the Secretary use a
prospective payment system (PPS).
<bullet> Section 1886(d)(1)(B) of the Act, which specifies that
certain hospitals and hospital units are excluded from the IPPS. These
hospitals and units are: rehabilitation hospitals and units; LTCHs;
psychiatric hospitals and units; children's hospitals; cancer
hospitals; extended neoplastic disease care hospitals, and hospitals
located outside the 50 States, the District of Columbia, and Puerto
Rico (that is, hospitals located in the U.S. Virgin Islands, Guam, the
Northern Mariana Islands, and American Samoa). Religious nonmedical
health care institutions (RNHCIs) are also excluded from the IPPS.
<bullet> Sections 123(a) and (c) of the BBRA (Public Law (Pub. L.)
106-113) and section 307(b)(1) of the BIPA (Pub. L. 106-554) (as
codified under section 1886(m)(1) of the Act), which provide for the
development and implementation of a prospective payment system for
payment for inpatient hospital services of LTCHs described in section
1886(d)(1)(B)(iv) of the Act.
<bullet> Sections 1814(l), 1820, and 1834(g) of the Act, which
specify that payments are made to critical access hospitals (CAHs)
(that is, rural hospitals or facilities that meet certain statutory
requirements) for inpatient and outpatient services and that these
payments are generally based on 101 percent of reasonable cost.
<bullet> Section 1886(a)(4) of the Act, which specifies that costs
of approved educational activities are excluded from the operating
costs of inpatient hospital services. Hospitals with approved graduate
medical education (GME) programs are paid for the direct costs of GME
in accordance with section 1886(h) of the Act.
<bullet> Section 1886(b)(3)(B)(viii) of the Act, which requires the
Secretary to reduce the applicable percentage increase that would
otherwise apply to the standardized amount applicable to a subsection
(d) hospital for discharges occurring in a fiscal year if the hospital
does not submit data on measures in a form and manner, and at a time,
specified by the Secretary.
<bullet> Section 1866(k) of the Act, which provides for the
establishment of a quality reporting program for hospitals described in
section 1886(d)(1)(B)(v) of the Act, referred to as ``PPS-exempt cancer
hospitals.''
<bullet> Section 1886(o) of the Act, which requires the Secretary
to establish a Hospital Value-Based Purchasing (VBP) Program, under
which value-based incentive payments are made in a fiscal year to
hospitals meeting performance standards established for a performance
period for such fiscal year.
<bullet> Section 1886(p) of the Act, which establishes a Hospital-
Acquired Condition (HAC) Reduction Program, under which payments to
applicable hospitals are adjusted to provide an incentive to reduce
hospital-acquired conditions.
<bullet> Section 1886(q) of the Act, as amended by section 15002 of
the 21st Century Cures Act, which establishes the Hospital Readmissions
Reduction Program. Under the program, payments for discharges from an
applicable hospital as defined under section 1886(d) of the Act will be
reduced to account for certain excess readmissions. Section 15002 of
the 21st Century Cures Act directs the Secretary to compare hospitals
with respect to the number of their Medicare-Medicaid dual-eligible
beneficiaries (dual-eligibles) in determining the extent of excess
readmissions.
<bullet> Section 1886(r) of the Act, as added by section 3133 of
the Affordable Care Act, which provides for a reduction to
disproportionate share hospital (DSH) payments under section
1886(d)(5)(F) of the Act and for a new uncompensated care payment to
eligible hospitals. Specifically, section 1886(r) of the Act requires
that, for fiscal year 2014 and each subsequent fiscal year, subsection
(d) hospitals that would otherwise receive a DSH payment made under
section 1886(d)(5)(F) of the Act will receive two separate payments:
(1) 25 percent of the amount they previously would have received under
section 1886(d)(5)(F) of the Act for DSH (``the empirically justified
amount''), and (2) an additional payment for the DSH hospital's
proportion of uncompensated care, determined as the product of three
factors. These three factors are: (1) 75 percent of the payments that
would otherwise be made under section 1886(d)(5)(F) of the Act; (2) 1
minus the percent change in the percent of individuals who are
uninsured; and (3) a hospital's uncompensated care amount relative to
the uncompensated care amount of all DSH hospitals expressed as a
percentage.
<bullet> Section 1886(m)(5) of the Act, which requires the
Secretary to reduce by two percentage points the annual update to the
standard Federal rate for discharges for a long-term care hospital
(LTCH) during the rate year for LTCHs that do not submit data in the
form, manner, and at a time, specified by the Secretary.
<bullet> Section 1886(m)(6) of the Act, as added by section
1206(a)(1) of the Pathway for Sustainable Growth Rate (SGR) Reform Act
of 2013 (Pub. L. 113-67) and amended by section 51005(a) of the
Bipartisan Budget Act of 2018 (Pub.
[[Page 48783]]
L. 115-123), which provided for the establishment of site neutral
payment rate criteria under the LTCH PPS, with implementation beginning
in FY 2016. Section 51005(b) of the Bipartisan Budget Act of 2018
amended section 1886(m)(6)(B) by adding new clause (iv), which
specifies that the IPPS comparable amount defined in clause (ii)(I)
shall be reduced by 4.6 percent for FYs 2018 through 2026.
<bullet> Section 1899B of the Act, as added by section 2(a) of the
Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT
Act) (Pub. L. 113-185), which provides for the establishment of
standardized data reporting for certain post-acute care providers,
including LTCHs.
<bullet> Section 1861(e) of the Act provides the specific statutory
authority for the hospital CoPs; section 1820(e) of the Act provides
similar authority for CAHs. The hospital provision at section
1861(e)(9) of the Act authorizes the Secretary to issue regulations the
Secretary deems necessary to protect the health and safety of patients
receiving services in those facilities; the CAH provision at section
1820(e)(3) of the Act authorizes the Secretary to issue such other
criteria as the Secretary may require.
2. Summary of the Major Provisions
The following is a summary of the major provisions in this final
rule. In general, these major provisions are being finalized as part of
the annual update to the payment policies and payment rates, consistent
with the applicable statutory provisions. A general summary of the
changes in this final rule is presented in section I.D. of the preamble
of this final rule.
a. MS-DRG Documentation and Coding Adjustment
Section 631 of the American Taxpayer Relief Act of 2012 (ATRA, Pub.
L. 112- 240) amended section 7(b)(1)(B) of Pub. L. 110-90 to require
the Secretary to make a recoupment adjustment to the standardized
amount of Medicare payments to acute care hospitals to account for
changes in MS-DRG documentation and coding that do not reflect real
changes in case-mix, totaling $11 billion over a 4-year period of FYs
2014, 2015, 2016, and 2017. The FY 2014 through FY 2017 adjustments
represented the amount of the increase in aggregate payments as a
result of not completing the prospective adjustment authorized under
section 7(b)(1)(A) of Public Law 110-90 until FY 2013. Prior to the
ATRA, this amount could not have been recovered under Public Law 110-
90. Section 414 of the Medicare Access and CHIP Reauthorization Act of
2015 (MACRA) (Pub. L. 114-10) replaced the single positive adjustment
we intended to make in FY 2018 with a 0.5 percent positive adjustment
to the standardized amount of Medicare payments to acute care hospitals
for FYs 2018 through 2023. (The FY 2018 adjustment was subsequently
adjusted to 0.4588 percent by section 15005 of the 21st Century Cures
Act.) Therefore, for FY 2023, we are making an adjustment of + 0.5
percent to the standardized amount.
b. Use of FY 2021 Data and Methodology Modifications for the FY 2023
IPPS and LTCH PPS Ratesetting
For the IPPS and LTCH PPS ratesetting, our longstanding goal is
always to use the best available data overall. In section I.F. of the
preamble of this final rule, we discuss our return to our historical
practice of using the most recent data available for purposes of FY
2023 ratesetting, including the FY 2021 MedPAR claims and FY 2020 cost
report data, with certain modifications to our usual ratesetting
methodologies to account for the anticipated decline in COVID-19
hospitalizations of Medicare beneficiaries at IPPS hospitals and LTCHs
as compared to FY 2021. As discussed in greater detail in section I.F.
of the preamble of this final rule, we believe that it is reasonable to
assume that some Medicare beneficiaries will continue to be
hospitalized with COVID-19 at IPPS hospitals and LTCHs in FY 2023.
Given this expectation, we believe it is appropriate to use FY 2021
data, as the most recent available data during the period of the COVID-
19 PHE, for purposes of the FY 2023 IPPS and LTCH PPS ratesetting.
However, as also discussed in greater detail in section I.F. of the
preamble of this final rule, we believe it is reasonable to assume
based on the information available at this time that there will be
fewer COVID-19 hospitalizations in FY 2023 than in FY 2021. Therefore,
we are finalizing our proposal to use the FY 2021 data for purposes of
the FY 2023 IPPS and LTCH PPS ratesetting but with modifications to our
usual ratesetting methodologies to account for the anticipated decline
in COVID-19 hospitalizations of Medicare beneficiaries at IPPS
hospitals and LTCHs as compared to FY 2021.
c. Continuation of the Low Wage Index Hospital Policy
To help mitigate wage index disparities between high wage and low
wage hospitals, in the FY 2020 IPPS/LTCH PPS rule (84 FR 42326 through
42332), we adopted a policy to increase the wage index values for
certain hospitals with low wage index values (the low wage index
hospital policy). This policy was adopted in a budget neutral manner
through an adjustment applied to the standardized amounts for all
hospitals. We also indicated our intention that this policy would be
effective for at least 4 years, beginning in FY 2020, in order to allow
employee compensation increases implemented by these hospitals
sufficient time to be reflected in the wage index calculation. We are
finalizing our proposals for the low wage index hospital policy to
continue for FY 2023, and to apply this policy in a budget neutral
manner by applying an adjustment to the standardized amounts.
d. Permanent Cap on Wage Index Decreases
Consistent with section 1886(d)(3)(E) of the Act, we adjust the
IPPS standardized amounts for area differences in hospital wage levels
by a factor (established by the Secretary) reflecting the relative
hospital wage level in the geographic area of the hospital compared to
the national average hospital wage level and update the wage index
annually based on a survey of wages and wage-related costs of short-
term, acute care hospitals. As described in section III.N. of the
preamble of this final rule, we have further considered the comments we
received during the FY 2022 rulemaking recommending a permanent 5-
percent cap policy to prevent large year-to-year variations in wage
index values as a means to reduce overall volatility for hospitals.
Under the authority at sections 1886(d)(3)(E) and 1886(d)(5)(I)(i) of
the Act, for FY 2023 and subsequent years, we proposed to apply a 5-
percent cap on any decrease to a hospital's wage index from its wage
index in the prior FY, regardless of the circumstances causing the
decline. That is, we proposed that a hospital's wage index for FY 2023
would not be less than 95 percent of its final wage index for FY 2022,
and that for subsequent years, a hospital's wage index would not be
less than 95 percent of its final wage index for the prior FY. We also
proposed to apply the proposed wage index cap policy in a budget
neutral manner through a national adjustment to the standardized amount
under our authority in sections 1886(d)(3)(E) and 1886(d)(5)(I)(i) of
the Act. After consideration of the public comments received, we are
finalizing these proposals without modification.
e. Application of the Rural Floor
As discussed in section III.G.1. of the preamble of this final
rule, based on the
[[Page 48784]]
district court's decision in Citrus HMA, LLC, d/b/a Seven Rivers
Regional Medical Center v. Becerra, No. 1:20-cv-00707 (D.D.C.)
(hereafter referred to as Citrus) and the comments we received, we are
not finalizing our rural floor wage index policy as proposed, which
would have excluded Sec. 412.103 hospitals from the calculation of the
rural floor and from the calculation of ``the wage index for rural
areas in the State in which the county is located'' as referred to in
section 1886(d)(8)(C)(iii) of the Act. Rather, we are finalizing a
policy that calculates the rural floor as it was calculated before FY
2020. For FY 2023 and subsequent years, we are finalizing a policy to
include the wage data of hospitals that have reclassified from urban to
rural under section 1886(d)(8)(E) of the Act (as implemented in the
regulations at Sec. 412.103) and have no additional form of
reclassification (MGCRB or Lugar) in the calculation of the rural
floor, and to include the wage data of such hospitals in the
calculation of ``the wage index for rural areas in the State in which
the county is located'' as referred to in section 1886(d)(8)(C)(iii) of
the Act.
f. DSH Payment Adjustment and Additional Payment for Uncompensated Care
Under section 1886(r) of the Act, which was added by section 3133
of the Affordable Care Act, starting in FY 2014, Medicare
disproportionate share hospitals (DSHs) receive 25 percent of the
amount they previously would have received under the statutory formula
for Medicare DSH payments in section 1886(d)(5)(F) of the Act. The
remaining amount, equal to 75 percent of the amount that otherwise
would have been paid as Medicare DSH payments, is paid as additional
payments after the amount is reduced for changes in the percentage of
individuals that are uninsured. Each Medicare DSH will receive an
additional payment based on its share of the total amount of
uncompensated care for all Medicare DSHs for a given time period.
In this final rule, we are updating our estimates of the three
factors used to determine uncompensated care payments for FY 2023. We
are also continuing to use uninsured estimates produced by CMS' Office
of the Actuary (OACT) as part of the development of the National Health
Expenditure Accounts (NHEA) in conjunction with more recently available
data in the calculation of Factor 2. For FY 2023, we are using the 2
most recent years of audited data on uncompensated care costs from
Worksheet S-10 of the FY 2018 cost reports and the FY 2019 cost reports
to calculate Factor 3 in the uncompensated care payment methodology for
all eligible hospitals. In addition, for FY 2024 and subsequent fiscal
years, we are using a 3-year average of the data on uncompensated care
costs from Worksheet S-10 for the 3 most recent fiscal years for which
audited data are available. Beginning in FY 2023, we are discontinuing
the use of low-income insured days as a proxy for uncompensated care to
determine Factor 3 for Indian Health Service (IHS) and Tribal hospitals
and hospitals located in Puerto Rico. In addition, we are implementing
certain methodological changes for calculating Factor 3 for FY 2023 and
subsequent fiscal years.
We recognize that discontinuing the use of the low-income insured
days proxy to calculate uncompensated care payments for Indian Health
Service (IHS) and Tribal hospitals and hospitals located in Puerto Rico
could result in a significant financial disruption for these hospitals.
Accordingly, we are using our exceptions and adjustments authority
under section 1886(d)(5)(I) of the Act to establish a new supplemental
payment for IHS and Tribal hospitals and hospitals located in Puerto
Rico, beginning in FY 2023.
As noted in section IV.F. of this final rule, we are not moving
forward with the proposed revisions to the regulations relating to the
treatment of section 1115 demonstration days for purposes of the DSH
adjustment in this final rule. We expect to revisit the issue of
section 1115 demonstration days in future rulemaking, and we encourage
interested parties to review any future proposal on this issue and to
submit their comments at that time.
g. Changes to GME Payments Based on Milton S. Hershey Medical Center,
et al. v. Becerra Litigation
On May 17, 2021, the U.S. District Court for the District of
Columbia ruled against CMS's method of calculating direct GME payments
to teaching hospitals when those hospitals' weighted full-time
equivalent (FTE) counts exceed their direct GME FTE cap. In Milton S.
Hershey Medical Center, et al. v. Becerra, the court ordered CMS to
recalculate reimbursement owed, holding that CMS's regulation
impermissibly modified the statutory weighting factors. The plaintiffs
in these consolidated cases alleged that as far back as 2005, the
proportional reduction that CMS applied to the weighted FTE count when
the weighted FTE count exceeded the FTE cap conflicted with the
Medicare statute, and it was an arbitrary and capricious exercise of
agency discretion under the Administrative Procedure Act. The court
held that the proportional reduction methodology impermissibly modified
the weighting factors statutorily assigned to residents and fellows.
The court granted the motion for summary judgment to plaintiffs'
motions, denied defendant's, and remanded to the Agency so that it
could recalculate plaintiffs' reimbursement payments consistent with
the court's opinion.
After reviewing the statutory language regarding the direct GME FTE
cap and the court's opinion, we have decided implement a modified
policy to be applied prospectively for all teaching hospitals, as well
as retroactively to the providers and cost years in Hershey and certain
other providers as described in greater detail in section V.F.2. of the
preamble of this final rule. The modified policy will address
situations for applying the FTE cap when a hospital's weighted FTE
count is greater than its FTE cap, but would not reduce the weighting
factor of residents that are beyond their initial residency period to
an amount less than 0.5. Specifically, effective for cost reporting
periods beginning on or after October 1, 2001, we are specifying that
if the hospital's unweighted number of FTE residents exceeds the FTE
cap, and the number of weighted FTE residents also exceeds that FTE
cap, the respective primary care and obstetrics and gynecology weighted
FTE counts and other weighted FTE counts are adjusted to make the total
weighted FTE count equal the FTE cap. If the number of weighted FTE
residents does not exceed that FTE cap, then the allowable weighted FTE
count for direct GME payment is the actual weighted FTE count.
h. Reduction of Hospital Payments for Excess Readmissions
We are making changes to policies for the Hospital Readmissions
Reduction Program, which was established under section 1886(q) of the
Act, as amended by section 15002 of the 21st Century Cures Act. The
Hospital Readmissions Reduction Program requires a reduction to a
hospital's base operating MS-DRG payment to account for excess
readmissions of selected applicable conditions. For FY 2023, the
reduction is based on a hospital's risk-adjusted readmission rate
during a multi-year period for acute myocardial infarction (AMI), heart
failure (HF), chronic obstructive pulmonary disease (COPD), elective
primary total hip arthroplasty/total knee arthroplasty (THA/TKA), and
coronary artery bypass graft (CABG)
[[Page 48785]]
surgery.\1\ In this FY 2023 IPPS/LTCH PPS final rule, we are discussing
the following policies: (1) resuming use of the Hospital 30-Day, All-
Cause, Risk-Standardized Readmission Rate (RSRR) following Pneumonia
Hospitalization measure (NQF #0506) for the FY 2024 program year; (2)
modification of the Hospital 30-Day, All-Cause, Risk-Standardized
Readmission Rate (RSRR) following Pneumonia Hospitalization measure
(NQF #0506) to exclude patients with COVID-19 diagnosis present on
admission from the measure numerator (outcome) and denominator
(cohort),\2\ beginning with the Hospital Specific Reports (HSRs) for
the FY 2023 program year; and (3) modification of all six condition/
procedure specific measures to include a covariate adjustment for
patient history of COVID-19 within 12 months prior to the index
admission beginning with the FY 2023 program year. In the FY 2023 IPPS/
LTCH PPS proposed rule we also sought comment on updating the Hospital
Readmissions Reduction Program to incorporate provider performance for
socially at-risk populations.
---------------------------------------------------------------------------
\1\ We note that in the FY 2023 IPPS/LTCH PPS proposed rule we
described the policy for FY 2017 and subsequent years, without
reference to flexibility due to the COVID-19 PHE. We have updated
this information to describe the policy for FY 2023.
\2\ We note that in the FY 2023 IPPS/LTCH PPS proposed rule (87
FR 28113) we inadvertently omitted reference to removing COVID-19
diagnosed patients from the numerator. We have corrected this
omission here.
---------------------------------------------------------------------------
i. Hospital Value-Based Purchasing (VBP) Program
Section 1886(o) of the Act requires the Secretary to establish a
Hospital VBP Program under which value-based incentive payments are
made in a fiscal year to hospitals based on their performance on
measures established for a performance period for such fiscal year. In
this final rule, we are finalizing our proposals to: (1) suppress the
Hospital Consumer Assessment of Healthcare Providers and Systems
(HCAHPS) and five Hospital-Acquired Infection (HAI) measures for the FY
2023 program year; and (2) update the baseline periods for certain
measures for the FY 2025 program year. We are also finalizing our
proposal to revise the scoring and payment methodology for the FY 2023
program year such that hospitals will not receive Total Performance
Scores (TPSs). Additionally, we are finalizing our proposal to award
each hospital a payment incentive multiplier that results in a value-
based incentive payment that is equal to the amount withheld for the
fiscal year (2 percent). We note that we are also announcing technical
updates to the measures in the Clinical Outcomes Domain.
j. Hospital-Acquired Condition (HAC) Reduction Program
In this FY 2023 IPPS/LTCH PPS final rule we are finalizing several
changes to the HAC Reduction Program, which was established under
section 1886(p) of the Act, to provide an incentive to hospitals to
reduce the incidence of hospital-acquired conditions. We refer readers
to the FY 2022 IPPS/LTCH PPS final rule for further details on our
measure suppression policy (86 FR 45301 through 45304). In this FY 2023
IPPS/LTCH PPS final rule, we are not finalizing our proposal to not
calculate or report measure results for the CMS PSI 90 measure for the
FY 2023 HAC Reduction Program. Although we will not calculate or report
CMS PSI 90 measure results for use in the HAC Reduction Program scoring
calculations for the program year, we will still calculate and report
CMS PSI 90 that is displayed on the main pages of the Compare tool
hosted by HHS after confidentially reporting these results to hospitals
via CMS PSI 90 specific HSRs and a 30-day preview period. We will
continue to calculate and report measure results for the NHSN CDC HAI
measures.
In this FY 2023 IPPS/LTCH PPS final rule, we are finalizing our
proposals to: (1) suppress the CMS PSI 90 measure and the five CDC NHSN
HAI measures from the calculation of measure scores and the Total HAC
Score, thereby not penalizing any hospital under the HAC Reduction
Program FY 2023 program year; (2) suppress CY 2021 CDC NHSN HAI
measures data from the FY 2024 HAC Reduction Program Year; (3) update
the measure specification to the minimum volume threshold for the CMS
PSI 90 measure beginning with the FY 2023 program year; (4) update the
measure specifications to risk-adjust for COVID-19 diagnosis in the CMS
PSI 90 measure beginning with the FY 2024 HAC Reduction Program Year;
and (5) update the NHSN CDC HAI data submission requirements for newly
opened hospitals beginning in the FY 2024 HAC Reduction Program.
In this FY 2023 IPPS/LTCH PPS final rule, we acknowledge feedback
we received on Requests for Information from stakeholders on two
topics: (1) the potential adoption of two digital National Healthcare
Safety Network (NHSN) measures: the NHSN Healthcare-associated
Clostridioides difficile Infection Outcome measure and NHSN Hospital-
Onset Bacteremia & Fungemia Outcome measure; and (2) on overarching
principles for measuring healthcare quality disparities across CMS
Quality Programs. In the FY 2023 IPPS/LTCH PPS proposed rule and this
final rule, we also clarified the removal of the no mapped location
policy beginning with the FY 2023 program year.
k. Hospital Inpatient Quality Reporting (IQR) Program
Under section 1886(b)(3)(B)(viii) of the Act, subsection (d)
hospitals are required to report data on measures selected by the
Secretary for a fiscal year in order to receive the full annual
percentage increase.
In this FY 2023 IPPS/LTCH PPS final rule, we are finalizing several
changes to the Hospital IQR Program. We are adopting 10 new measures:
(1) Hospital Commitment to Health Equity beginning with the CY 2023
reporting period/FY 2025 payment determination; (2) Screening for
Social Drivers of Health beginning with voluntary reporting for the CY
2023 reporting period and mandatory reporting beginning with the CY
2024 reporting period/FY 2026 payment determination; (3) Screen
Positive Rate for Social Drivers of Health beginning with voluntary
reporting for the CY 2023 reporting period and mandatory reporting
beginning with the CY 2024 reporting period/FY 2026 payment
determination; (4) Cesarean Birth electronic clinical quality measure
(eCQM) with inclusion in the eCQM measure set beginning with the CY
2023 reporting period/FY 2025 payment determination, and mandatory
reporting beginning with the CY 2024 reporting period/FY 2026 payment
determination; (5) Severe Obstetric Complications eCQM with inclusion
in the eCQM measure set beginning with the CY 2023 reporting period/FY
2025 payment determination, and mandatory reporting beginning with the
CY 2024 reporting period/FY 2026 payment determination; (6) Hospital-
Harm--Opioid-Related Adverse Events eCQM (NQF #3501e) inclusion in the
eCQM measure set beginning with the CY 2024 reporting period/FY 2026
payment determination; (7) Global Malnutrition Composite Score eCQM
(NQF #3592e) inclusion in the eCQM measure set beginning with the CY
2024 reporting period/FY 2026 payment determination; (8) Hospital-
Level, Risk Standardized Patient-Reported Outcomes Performance Measure
Following Elective Primary Total Hip Arthroplasty (THA) and/or Total
Knee Arthroplasty (TKA) (NQF #3559) beginning with two voluntary
periods, followed by mandatory reporting for the
[[Page 48786]]
reporting period which runs from July 1, 2025 through June 30, 2026,
impacting the FY 2028 payment determination; (9) Medicare Spending Per
Beneficiary (MSPB) Hospital measure (NQF #2158) beginning with the FY
2024 payment determination; and (10) Hospital-Level Risk-Standardized
Complication Rate (RSCR) Following Elective Primary THA/TKA (NQF #1550)
beginning with the FY 2024 payment determination. We are refining two
current measures beginning with the FY 2024 payment determination: (1)
Hospital[hyphen]Level, Risk[hyphen]Standardized Payment Associated with
an Episode-of-Care for Primary Elective THA/TKA measure; and (2) Excess
Days in Acute Care (EDAC) After Hospitalization for Acute Myocardial
Infarction (AMI) measure (NQF #2881). In this FY 2023 IPPS/LTCH PPS
final rule, we acknowledge feedback we received on the potential future
development and inclusion of two National Healthcare Safety Network
(NHSN) measures: (1) Healthcare-Associated Clostridioides difficile
Infection Outcome; and (2) Hospital-Onset Bacteremia & Fungemia
Outcome. We thank commenters for their feedback.
We are finalizing changes to current policies related to eCQMs and
hybrid measures: (1) Modification of the eCQM reporting and submission
requirements to increase the number of eCQMs to be reported beginning
with the CY 2024 reporting period/FY 2026 payment determination; (2)
removal of the zero denominator declarations and case threshold
exemption policies for hybrid measures beginning with the FY 2026
payment determination; (3) adoption of data submission and reporting
requirements for patient-reported outcome-based performance measures
(PRO-PMs) beginning with the FY 2026 payment determination; and (4)
modification of the eCQM validation policy to increase the requirement
from 75 percent to 100 percent of requested medical records, beginning
with the FY 2025 payment determination.
With respect to public reporting, we are establishing a hospital
designation related to maternity care to be publicly-reported on a
public-facing website beginning in Fall 2023. In the FY 2023 IPPS/PPS
LTCH PPS proposed rule, we sought comments on other potential
associated activities regarding this designation (87 FR 28549 through
28550). Additionally, we sought comments on ongoing ways we can advance
digital quality measurement and use of Fast Healthcare Interoperability
Resources (FHIR) (87 FR 28486 through 28489). We thank commenters for
their feedback.
l. PPS-Exempt Cancer Hospital Quality Reporting Program
Section 1866(k)(1) of the Act requires, for purposes of FY 2014 and
each subsequent fiscal year, that a hospital described in section
1886(d)(1)(B)(v) of the Act (a PPS-exempt cancer hospital, or a PCH)
submit data in accordance with section 1866(k)(2) of the Act with
respect to such fiscal year. There is no financial impact to PCH
Medicare payment if a PCH does not participate.
In this FY 2023 IPPS/LTCH PPS final rule, we are finalizing our
proposal to adopt a patient safety exception into the measure removal
policy. We are also finalizing our proposal to begin public display of
the 30-Day Unplanned Readmissions for Cancer Patients measure (NQF
#3188) (PCH-36). We are finalizing with modification our proposal to
begin public display of the Proportion of Patients Who Died from Cancer
Receiving Chemotherapy in the Last 14 Days of Life measure (NQF #0210)
(PCH-32), the Proportion of Patients Who Died from Cancer Not Admitted
to Hospice measure (NQF #0215) (PCH-34), the Proportion of Patients Who
Died from Cancer Admitted to the ICU in the Last 30 Days of Life
measure (NQF #0213) (PCH-33), and the Proportion of Patients Who Died
from Cancer Admitted to Hospice for Less Than Three Days measure (NQF
#0216) (PCH-35). In addition, along with the Hospital IQR and HAC
Reduction Programs, we respond to comments received on our request for
comment on the potential adoption of two digital National Healthcare
Safety Network (NHSN) measures: the NHSN Healthcare-associated
Clostridioides difficile Infection Outcome measure and NHSN Hospital-
Onset Bacteremia and Fungemia Outcome measure.
m. Medicare Promoting Interoperability Program
For CY 2023, we are finalizing several proposed changes to the
Medicare Promoting Interoperability Program. Specifically, we are: (1)
requiring the Electronic Prescribing Objective's Query of Prescription
Drug Monitoring Program (PDMP) measure while maintaining the associated
points at 10 points beginning with the EHR reporting period in CY 2023;
(2) expanding the Query of PDMP measure to not only include Schedule II
opioids but also Schedule III and IV drugs beginning with the CY 2023
EHR reporting period and are adding exclusions; (3) adding a new Health
Information Exchange (HIE) Objective option, the Enabling Exchange
under the Trusted Exchange Framework and Common Agreement (TEFCA)
measure (requiring a yes/no response), as an optional alternative to
fulfill the objective, beginning with the CY 2023 EHR reporting period;
(4) modifying the Public Health and Clinical Data Exchange Objective by
adding an Antibiotic Use and Antibiotic Resistance (AUR) measure in
addition to the current four required measures (Syndromic Surveillance
Reporting, Immunization Registry Reporting, Electronic Case Reporting,
and Electronic Reportable Laboratory Result Reporting) beginning with
the CY 2024 EHR reporting period; (5) consolidating the current options
from three to two levels of active engagement for the Public Health and
Clinical Data Exchange Objective, requiring the reporting of the active
engagement option selected for the measures under the objective
beginning with the CY 2023 EHR reporting period, and modifying the
amount of time spent at the option 1 level of active engagement (pre-
production and validation) to one EHR reporting period beginning with
the CY 2024 EHR reporting period; (6) modifying the scoring methodology
for the Medicare Promoting Interoperability Program beginning in CY
2023; (7) instituting public reporting of certain Medicare Promoting
Interoperability Program data beginning with the CY 2023 EHR reporting
period; (8) removing regulation text for the objectives and measures in
the Medicare Promoting Interoperability Program from paragraph (e)
under 42 CFR 495.24 and adding new paragraph (f) beginning in CY 2023;
and (9) adopting two new eCQMs in the Medicare Promoting
Interoperability Program's eCQM measure set beginning with the CY 2023
reporting period, two new eCQMs in the Medicare Promoting
Interoperability Program's eCQM measure set beginning with the CY 2024
reporting period, and modifying the eCQM data reporting and submission
requirements to increase the number of eCQMs required to be reported
and the total number of eCQMs to be reported beginning with the CY 2024
reporting period, which is in alignment with the eCQM updates finalized
for the Hospital IQR Program.
n. Condition of Participation (CoP) Requirements for Hospitals and CAHs
to Continue Reporting Data for COVID-19 and Influenza After the PHE
ends as Determined by the Secretary
In this final rule, we are revising the hospital and CAH infection
prevention and control CoP requirements to continue COVID-19-related
reporting requirements commencing either upon the conclusion of the
current COVID-19 PHE declaration or the effective date of
[[Page 48787]]
this proposed rule, whichever is later, and lasting until April 30,
2024 (unless the Secretary determines an earlier end date). We have
withdrawn our proposal to establish additional data reporting
requirements to address future PHEs related to epidemics and infectious
diseases.
3. Summary of Costs and Benefits
The following table provides a summary of the costs, savings, and
benefits associated with the major provisions described in section
I.A.3. of the preamble of this final rule.
[[Page 48788]]
[GRAPHIC] [TIFF OMITTED] TR10AU22.000
[[Page 48789]]
[GRAPHIC] [TIFF OMITTED] TR10AU22.001
[[Page 48790]]
[GRAPHIC] [TIFF OMITTED] TR10AU22.002
[[Page 48791]]
B. Background Summary
1. Acute Care Hospital Inpatient Prospective Payment System (IPPS)
Section 1886(d) of the Act sets forth a system of payment for the
operating costs of acute care hospital inpatient stays under Medicare
Part A (Hospital Insurance) based on prospectively set rates. Section
1886(g) of the Act requires the Secretary to use a prospective payment
system (PPS) to pay for the capital-related costs of inpatient hospital
services for these ``subsection (d) hospitals.'' Under these PPSs,
Medicare payment for hospital inpatient operating and capital-related
costs is made at predetermined, specific rates for each hospital
discharge. Discharges are classified according to a list of diagnosis-
related groups (DRGs).
The base payment rate is comprised of a standardized amount that is
divided into a labor-related share and a nonlabor-related share. The
labor-related share is adjusted by the wage index applicable to the
area where the hospital is located. If the hospital is located in
Alaska or Hawaii, the nonlabor-related share is adjusted by a cost-of-
living adjustment factor. This base payment rate is multiplied by the
DRG relative weight.
If the hospital treats a high percentage of certain low-income
patients, it receives a percentage add-on payment applied to the DRG-
adjusted base payment rate. This add-on payment, known as the
disproportionate share hospital (DSH) adjustment, provides for a
percentage increase in Medicare payments to hospitals that qualify
under either of two statutory formulas designed to identify hospitals
that serve a disproportionate share of low-income patients. For
qualifying hospitals, the amount of this adjustment varies based on the
outcome of the statutory calculations. The Affordable Care Act revised
the Medicare DSH payment methodology and provides for a new additional
Medicare payment beginning on October 1, 2013, that considers the
amount of uncompensated care furnished by the hospital relative to all
other qualifying hospitals.
If the hospital is training residents in an approved residency
program(s), it receives a percentage add-on payment for each case paid
under the IPPS, known as the indirect medical education (IME)
adjustment. This percentage varies, depending on the ratio of residents
to beds.
Additional payments may be made for cases that involve new
technologies or medical services that have been approved for special
add-on payments. In general, to qualify, a new technology or medical
service must demonstrate that it is a substantial clinical improvement
over technologies or services otherwise available, and that, absent an
add-on payment, it would be inadequately paid under the regular DRG
payment. In addition, certain transformative new devices and certain
antimicrobial products may qualify under an alternative inpatient new
technology add-on payment pathway by demonstrating that, absent an add-
on payment, they would be inadequately paid under the regular DRG
payment.
The costs incurred by the hospital for a case are evaluated to
determine whether the hospital is eligible for an additional payment as
an outlier case. This additional payment is designed to protect the
hospital from large financial losses due to unusually expensive cases.
Any eligible outlier payment is added to the DRG-adjusted base payment
rate, plus any DSH, IME, and new technology or medical service add-on
adjustments and, beginning in FY 2023 for IHS and Tribal hospitals and
hospitals located in Puerto Rico, the new supplemental payment.
Although payments to most hospitals under the IPPS are made on the
basis of the standardized amounts, some categories of hospitals are
paid in whole or in part based on their hospital-specific rate, which
is determined from their costs in a base year. For example, sole
community hospitals (SCHs) receive the higher of a hospital-specific
rate based on their costs in a base year (the highest of FY 1982, FY
1987, FY 1996, or FY 2006) or the IPPS Federal rate based on the
standardized amount. SCHs are the sole source of care in their areas.
Specifically, section 1886(d)(5)(D)(iii) of the Act defines an SCH as a
hospital that is located more than 35 road miles from another hospital
or that, by reason of factors such as an isolated location, weather
conditions, travel conditions, or absence of other like hospitals (as
determined by the Secretary), is the sole source of hospital inpatient
services reasonably available to Medicare beneficiaries. In addition,
certain rural hospitals previously designated by the Secretary as
essential access community hospitals are considered SCHs.
Under current law, the Medicare-dependent, small rural hospital
(MDH) program is effective through FY 2022. For discharges occurring on
or after October 1, 2007, but before October 1, 2022, an MDH receives
the higher of the Federal rate or the Federal rate plus 75 percent of
the amount by which the Federal rate is exceeded by the highest of its
FY 1982, FY 1987, or FY 2002 hospital-specific rate. MDHs are a major
source of care for Medicare beneficiaries in their areas. Section
1886(d)(5)(G)(iv) of the Act defines an MDH as a hospital that is
located in a rural area (or, as amended by the Bipartisan Budget Act of
2018, a hospital located in a State with no rural area that meets
certain statutory criteria), has not more than 100 beds, is not an SCH,
and has a high percentage of Medicare discharges (not less than 60
percent of its inpatient days or discharges in its cost reporting year
beginning in FY 1987 or in two of its three most recently settled
Medicare cost reporting years). As section 50205 of the Bipartisan
Budget Act extended the MDH program through FY 2022 only, for FY 2023,
beginning on October 1, 2022, the MDH program will no longer be in
effect absent a change in law. Because the MDH program is not
authorized by statute beyond September 30, 2022, beginning October 1,
2022, all hospitals that previously qualified for MDH status under
section 1886(d)(5)(G) of the Act will no longer have MDH status and
will be paid based on the IPPS Federal rate.
Section 1886(g) of the Act requires the Secretary to pay for the
capital-related costs of inpatient hospital services in accordance with
a prospective payment system established by the Secretary. The basic
methodology for determining capital prospective payments is set forth
in our regulations at 42 CFR 412.308 and 412.312. Under the capital
IPPS, payments are adjusted by the same DRG for the case as they are
under the operating IPPS. Capital IPPS payments are also adjusted for
IME and DSH, similar to the adjustments made under the operating IPPS.
In addition, hospitals may receive outlier payments for those cases
that have unusually high costs.
The existing regulations governing payments to hospitals under the
IPPS are located in 42 CFR part 412, subparts A through M.
2. Hospitals and Hospital Units Excluded From the IPPS
Under section 1886(d)(1)(B) of the Act, as amended, certain
hospitals and hospital units are excluded from the IPPS. These
hospitals and units are: Inpatient rehabilitation facility (IRF)
hospitals and units; long-term care hospitals (LTCHs); psychiatric
hospitals and units; children's hospitals; cancer hospitals; extended
neoplastic disease care hospitals, and hospitals located outside the 50
States, the District of Columbia, and Puerto Rico (that is, hospitals
located in the U.S. Virgin Islands, Guam, the Northern Mariana Islands,
and American Samoa). Religious nonmedical health care
[[Page 48792]]
institutions (RNHCIs) are also excluded from the IPPS. Various sections
of the Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33), the
Medicare, Medicaid and SCHIP [State Children's Health Insurance
Program] Balanced Budget Refinement Act of 1999 (BBRA, Pub. L. 106-
113), and the Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000 (BIPA, Pub. L. 106-554) provide for the
implementation of PPSs for IRF hospitals and units, LTCHs, and
psychiatric hospitals and units (referred to as inpatient psychiatric
facilities (IPFs)). (We note that the annual updates to the LTCH PPS
are included along with the IPPS annual update in this document.
Updates to the IRF PPS and IPF PPS are issued as separate documents.)
Children's hospitals, cancer hospitals, hospitals located outside the
50 States, the District of Columbia, and Puerto Rico (that is,
hospitals located in the U.S. Virgin Islands, Guam, the Northern
Mariana Islands, and American Samoa), and RNHCIs continue to be paid
solely under a reasonable cost-based system, subject to a rate-of-
increase ceiling on inpatient operating costs. Similarly, extended
neoplastic disease care hospitals are paid on a reasonable cost basis,
subject to a rate-of-increase ceiling on inpatient operating costs.
The existing regulations governing payments to excluded hospitals
and hospital units are located in 42 CFR parts 412 and 413.
3. Long-Term Care Hospital Prospective Payment System (LTCH PPS)
The Medicare prospective payment system (PPS) for LTCHs applies to
hospitals described in section 1886(d)(1)(B)(iv) of the Act, effective
for cost reporting periods beginning on or after October 1, 2002. The
LTCH PPS was established under the authority of sections 123 of the
BBRA and section 307(b) of the BIPA (as codified under section
1886(m)(1) of the Act). Section 1206(a) of the Pathway for SGR Reform
Act of 2013 (Pub. L. 113-67) established the site neutral payment rate
under the LTCH PPS, which made the LTCH PPS a dual rate payment system
beginning in FY 2016. Under this statute, effective for LTCH's cost
reporting periods beginning in FY 2016 cost reporting period, LTCHs are
generally paid for discharges at the site neutral payment rate unless
the discharge meets the patient criteria for payment at the LTCH PPS
standard Federal payment rate. The existing regulations governing
payment under the LTCH PPS are located in 42 CFR part 412, subpart O.
Beginning October 1, 2009, we issue the annual updates to the LTCH PPS
in the same documents that update the IPPS.
4. Critical Access Hospitals (CAHs)
Under sections 1814(l), 1820, and 1834(g) of the Act, payments made
to critical access hospitals (CAHs) (that is, rural hospitals or
facilities that meet certain statutory requirements) for inpatient and
outpatient services are generally based on 101 percent of reasonable
cost. Reasonable cost is determined under the provisions of section
1861(v) of the Act and existing regulations under 42 CFR part 413.
5. Payments for Graduate Medical Education (GME)
Under section 1886(a)(4) of the Act, costs of approved educational
activities are excluded from the operating costs of inpatient hospital
services. Hospitals with approved graduate medical education (GME)
programs are paid for the direct costs of GME in accordance with
section 1886(h) of the Act. The amount of payment for direct GME costs
for a cost reporting period is based on the hospital's number of
residents in that period and the hospital's costs per resident in a
base year. The existing regulations governing payments to the various
types of hospitals are located in 42 CFR part 413.
C. Summary of Provisions of Recent Legislation Implemented in This
Final Rule
1. The Medicare Access and CHIP Reauthorization Act of 2015 (Pub. L.
114-10)
Section 414 of the Medicare Access and CHIP Reauthorization Act of
2015 (MACRA, Pub. L. 114-10) specifies a 0.5 percent positive
adjustment to the standardized amount of Medicare payments to acute
care hospitals for FYs 2018 through 2023. These adjustments follow the
recoupment adjustment to the standardized amounts under section 1886(d)
of the Act based upon the Secretary's estimates for discharges
occurring from FYs 2014 through 2017 to fully offset $11 billion, in
accordance with section 631 of the ATRA. The FY 2018 adjustment was
subsequently adjusted to 0.4588 percent by section 15005 of the 21st
Century Cures Act.
D. Issuance of Proposed Rulemaking
In the FY 2023 IPPS/LTCH PPS proposed rule appearing in the May 10,
2022 Federal Register (87 FR 28108), we set forth proposed payment and
policy changes to the Medicare IPPS for FY 2023 operating costs and
capital-related costs of acute care hospitals and certain hospitals and
hospital units that are excluded from IPPS. In addition, we set forth
proposed changes to the payment rates, factors, and other payment and
policy-related changes to programs associated with payment rate
policies under the LTCH PPS for FY 2023.
The following is a general summary of the changes that we proposed
to make.
1. Proposed Changes to MS-DRG Classifications and Recalibrations of
Relative Weights
In section II. of the preamble of the proposed rule, we include the
following:
<bullet> Proposed changes to MS-DRG classifications based on our
yearly review for FY 2023.
<bullet> Proposed adjustment to the standardized amounts under
section 1886(d) of the Act for FY 2023 in accordance with the
amendments made to section 7(b)(1)(B) of Public Law 110-90 by section
414 of the MACRA.
<bullet> Proposed recalibration of the MS-DRG relative weights,
including a proposed 10-percent cap on decreases in an MS-DRG relative
weight from one fiscal year to the next.
<bullet> A discussion of the proposed FY 2023 status of new
technologies approved for add-on payments for FY 2022, a presentation
of our evaluation and analysis of the FY 2023 applicants for add-on
payments for high-cost new medical services and technologies (including
public input, as directed by Pub. L. 108-173, obtained in a town hall
meeting) for applications not submitted under an alternative pathway,
and a discussion of the proposed status of FY 2023 new technology
applicants under the alternative pathways for certain medical devices
and certain antimicrobial products.
<bullet> A proposal to use National Drug Codes (NDCs) to identify
cases involving use of therapeutic agents approved for new technology
add-on payments.
<bullet> A proposal to publicly post online future applications for
new technology add-on payments. Specifically, beginning with the FY
2024 application cycle, we proposed to post online the completed
application forms and certain related materials and updated application
information submitted subsequent to the initial application submission
for new technology add-on payments, with the exception of certain cost
and volume information and certain additional materials (as discussed
more fully in section II.F.9. of the proposed rule), no later than the
issuance of the proposed rule.
[[Page 48793]]
2. Proposed Changes to the Hospital Wage Index for Acute Care Hospitals
In section III. of the preamble of the proposed rule, we proposed
to make revisions to the wage index for acute care hospitals and the
annual update of the wage data. Specific issues addressed include, but
were not limited to, the following:
<bullet> The proposed FY 2023 wage index update using wage data
from cost reporting periods beginning in FY 2019.
<bullet> Calculation, analysis, and implementation of the proposed
occupational mix adjustment to the wage index for acute care hospitals
for FY 2023 based on the 2019 Occupational Mix Survey.
<bullet> Proposed application of the rural, imputed and frontier
State floors, and continuation of the low wage index hospital policy.
<bullet> Proposed revisions to the wage index for acute care
hospitals, based on hospital redesignations and reclassifications under
sections 1886(d)(8)(B), (d)(8)(E), and (d)(10) of the Act.
<bullet> Proposed adjustment to the wage index for acute care
hospitals for FY 2023 based on commuting patterns of hospital employees
who reside in a county and work in a different area with a higher wage
index.
<bullet> Proposed permanent cap on annual wage index decreases.
<bullet> Proposed labor-related share for the proposed FY 2023 wage
index.
3. Other Decisions and Proposed Changes to the IPPS for Operating Costs
In section V. of the preamble of the proposed rule, we discuss
proposed changes or clarifications of a number of the provisions of the
regulations in 42 CFR parts 412 and 413, including the following:
<bullet> Proposed inpatient hospital update for FY 2023.
<bullet> Proposed updated national and regional case-mix values and
discharges for purposes of determining RRC status.
<bullet> Proposed payment adjustment for low-volume hospitals for
FY 2023 and subsequent years.
<bullet> The statutorily required IME adjustment factor for FY
2023.
<bullet> Proposed changes to the methodologies for determining
Medicare DSH payments and the additional payments for uncompensated
care.
<bullet> Proposed new supplemental payment for IHS/Tribal and
Puerto Rico hospitals.
<bullet> Proposed revisions to the regulations regarding the
counting of days associated with section 1115 demonstrations in the
Medicaid fraction.
<bullet> Discussion of statutory expiration of the MDH program at
the end of FY 2022.
<bullet> Proposed requirements for payment adjustments under the
Hospital Readmissions Reduction Program for FY 2023.
<bullet> The provision of estimated and newly established
performance standards for the calculation of value-based incentive
payments, as well as a proposal to suppress multiple measures and
provide net-neutral payment adjustments under the Hospital Value-Based
Purchasing Program.
<bullet> Proposed requirements for payment adjustments to hospitals
under the HAC Reduction Program for FY 2023.
<bullet> Discussion of and proposed changes relating to the
implementation of the Rural Community Hospital Demonstration Program in
FY 2023.
<bullet> Proposed GME payment change in response to Milton S.
Hershey Medical Center et al v. Becerra litigation.
<bullet> Proposed nursing and allied health education program
Medicare Advantage (MA) add-on rates and direct GME MA percent
reductions for CYs 2020 and 2021.
<bullet> Proposal to allow Medicare GME affiliation agreements
within certain rural track full-time equivalent limitations.
<bullet> Proposed payment adjustment for certain clinical trial and
expanded access use immunotherapy cases.
4. Proposed FY 2023 Policy Governing the IPPS for Capital-Related Costs
In section VI. of the preamble to the proposed rule, we discussed
the proposed payment policy requirements for capital-related costs and
capital payments to hospitals for FY 2023.
5. Proposed Changes to the Payment Rates for Certain Excluded
Hospitals: Rate-of-Increase Percentages
In section VII. of the preamble of the proposed rule, we discussed
the following:
<bullet> Proposed changes to payments to certain excluded hospitals
for FY 2023.
<bullet> Proposed continued implementation of the Frontier
Community Health Integration Project (FCHIP) Demonstration.
6. Proposed Changes to the LTCH PPS
In section VIII. of the preamble of the proposed rule, we set forth
proposed changes to the LTCH PPS Federal payment rates, factors, and
other payment rate policies under the LTCH PPS for FY 2023.
7. Proposed Changes Relating to Quality Data Reporting for Specific
Providers and Suppliers
In section IX. of the preamble of the proposed rule, we addressed
the following:
<bullet> Proposed requirements for the Hospital Inpatient Quality
Reporting (IQR) Program.
<bullet> Proposed changes to the requirements for the quality
reporting program for PPS-exempt cancer hospitals (PCHQR Program).
<bullet> For the Long Term Care Hospital Quality Reporting Program
(LTCH QRP), we requested information on CMS' overarching principles for
measuring healthcare disparities across CMS Quality Programs, including
the LTCH QRP. We also requested information on the potential adoption
of one future National Healthcare Safety Network (NHSN) digital quality
measure (dQM) for the LTCH QRP, as well as quality measure concepts
under consideration for future years.
<bullet> Proposed changes to requirements pertaining to eligible
hospitals and CAHs participating in the Medicare Promoting
Interoperability Program.
8. Other Proposals and Comment Solicitations Included in the Proposed
Rule
Section X. of the preamble to the proposed rule includes the
following:
<bullet> Proposed codification of policies related to the costs
incurred for qualified and non-qualified deferred compensation plans.
<bullet> Proposed changes pertaining to the CoPs at 42 CFR part 482
for hospitals, and at 42 CFR part 485, subpart F, for CAHs.
<bullet> Solicitation of comments on the appropriateness of payment
adjustments that would account for the additional resource costs for
hospitals for the procurement of wholly domestically made NIOSH-
approved surgical N95 respirators.
9. Other Provisions of the Proposed Rule
Section XI. of the preamble to the proposed rule includes our
discussion of the MedPAC Recommendations.
Section XII. of the preamble to the proposed rule included the
following:
<bullet> A descriptive listing of the public use files associated
with the proposed rule.
<bullet> The collection of information requirements for entities
based on our proposals.
<bullet> Information regarding our responses to public comments.
[[Page 48794]]
10. Determining Prospective Payment Operating and Capital Rates and
Rate-of-Increase Limits for Acute Care Hospitals
In sections II. and III. of the Addendum to the proposed rule, we
set forth proposed changes to the amounts and factors for determining
the proposed FY 2023 prospective payment rates for operating costs and
capital-related costs for acute care hospitals. We proposed to
establish the threshold amounts for outlier cases. In addition, in
section IV. of the Addendum to the proposed rule, we addressed the
proposed update factors for determining the rate-of-increase limits for
cost reporting periods beginning in FY 2023 for certain hospitals
excluded from the IPPS.
11. Determining Prospective Payment Rates for LTCHs
In section V. of the Addendum to the proposed rule, we set forth
proposed changes to the amounts and factors for determining the
proposed FY 2023 LTCH PPS standard Federal payment rate and other
factors used to determine LTCH PPS payments under both the LTCH PPS
standard Federal payment rate and the site neutral payment rate in FY
2023. We are proposed to establish the adjustments for the wage index,
labor-related share, the cost-of-living adjustment, and high-cost
outliers, including the applicable fixed-loss amounts and the LTCH
cost-to-charge ratios (CCRs) for both payment rates.
12. Impact Analysis
In Appendix A of the proposed rule, we set forth an analysis of the
impact the proposed changes would have on affected acute care
hospitals, CAHs, LTCHs and other entities.
13. Recommendation of Update Factors for Operating Cost Rates of
Payment for Hospital Inpatient Services
In Appendix B of the proposed rule, as required by sections
1886(e)(4) and (e)(5) of the Act, we provided our recommendations of
the appropriate percentage changes for FY 2023 for the following:
<bullet> A single average standardized amount for all areas for
hospital inpatient services paid under the IPPS for operating costs of
acute care hospitals (and hospital-specific rates applicable to SCHs
and MDHs).
<bullet> Target rate-of-increase limits to the allowable operating
costs of hospital inpatient services furnished by certain hospitals
excluded from the IPPS.
<bullet> The LTCH PPS standard Federal payment rate and the site
neutral payment rate for hospital inpatient services provided for LTCH
PPS discharges.
14. Discussion of Medicare Payment Advisory Commission Recommendations
Under section 1805(b) of the Act, MedPAC is required to submit a
report to Congress, no later than March 15 of each year, in which
MedPAC reviews and makes recommendations on Medicare payment policies.
MedPAC's March 2022 recommendations concerning hospital inpatient
payment policies address the update factor for hospital inpatient
operating costs and capital-related costs for hospitals under the IPPS.
We addressed these recommendations in Appendix B of the proposed rule.
For further information relating specifically to the MedPAC March 2022
report or to obtain a copy of the report, contact MedPAC at (202) 220-
3700 or visit MedPAC's website at <a href="https://www.medpac.gov">https://www.medpac.gov</a>.
E. Advancing Health Information Exchange
The Department of Health and Human Services (HHS) has a number of
initiatives designed to encourage and support the adoption of
interoperable health information technology and to promote nationwide
health information exchange to improve health care and patient access
to their digital health information.
To further interoperability in post-acute care settings, CMS and
the Office of the National Coordinator for Health Information
Technology (ONC) participate in the Post-Acute Care Interoperability
Workgroup (PACIO) to facilitate collaboration with industry
stakeholders to develop Health Level Seven International[supreg] (HL7)
Fast Healthcare Interoperability Resources[supreg] (FHIR) standards.
These standards could support the exchange and reuse of patient
assessment data derived from the post-acute care (PAC) setting
assessment tools, such as Minimum Data Set (MDS), Inpatient
Rehabilitation Facility-Patient Assessment Instrument (IRF-PAI), Long
Term Care Hospital (LTCH) Continuity Assessment Record and Evaluation
(CARE) Data Set (LCDS), Outcome and Assessment Information Set (OASIS),
and other sources.<SUP>3 4</SUP> The PACIO Project has focused on HL7
FHIR implementation guides for functional status, cognitive status and
new use cases on advance directives, re-assessment timepoints, and
Speech, Language, Swallowing Cognitive communications and Hearing
(SPLASCH).\5\ We encourage PAC provider and health information
technology (IT) vendor participation as the efforts advance. The CMS
Data Element Library (DEL) continues to be updated and serves as a
resource for PAC assessment data elements and their associated mappings
to health IT standards, such as Logical Observation Identifiers Names
and Codes (LOINC) and Systematized Nomenclature of Medicine Clinical
Terms (SNOMED).\6\ The DEL furthers CMS' goal of data standardization
and interoperability. Standards in the DEL can be referenced on the CMS
website (<a href="https://del.cms.gov/DELWeb/pubHome">https://del.cms.gov/DELWeb/pubHome</a>) and in the ONC
Interoperability Standards Advisory (ISA). The 2022 ISA is available at
<a href="https://www.healthit.gov/isa/sites/isa/files/inline-files/2022-ISA-Reference-Edition.pdf">https://www.healthit.gov/isa/sites/isa/files/inline-files/2022-ISA-Reference-Edition.pdf</a>.
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\3\ HL7 FHIR Release 4. Available at: <a href="https://www.hl7.org/fhir/">https://www.hl7.org/fhir/</a>.
\4\ HL7 FHIR. PACIO Functional Status Implementation Guide.
Available at: <a href="https://paciowg.github.io/functional-status-ig/">https://paciowg.github.io/functional-status-ig/</a>.
\5\ PACIO Project. Available at: <a href="http://pacioproject.org/about/">http://pacioproject.org/about/</a>.
\6\ CMS Data Element Library Fact Sheet. Available at: <a href="https://www.cms.gov/newsroom/fact-sheets/cms-data-element-library-fact-sheet">https://www.cms.gov/newsroom/fact-sheets/cms-data-element-library-fact-sheet</a>.
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The 21st Century Cures Act (Cures Act) (Pub. L. 114-255, enacted
December 13, 2016) required HHS and ONC to take steps further
interoperability for providers in settings across the care
continuum.\7\ Specifically, section 4003(b) of the Cures Act required
ONC to take steps to advance interoperability through the development
of a a Trusted Exchange Framework and Common Agreement aimed at
establishing full network-to-network exchange of health information
nationally. On January 18, 2022, ONC announced a significant milestone
by releasing the Trusted Exchange Framework \8\ and Common Agreement
Version 1.\9\ The Trusted Exchange Framework is a set of non-binding
principles for health information exchange, and the Common Agreement is
a contract that advances those principles. The Common Agreement and the
incorporated by reference Qualified Health Information Network
Technical Framework Version 1 establish the technical infrastructure
[[Page 48795]]
model and governing approach for different health information networks
and their users to securely share clinical information with each other,
all under commonly agreed to terms. The technical and policy
architecture of how exchange occurs under the Common Agreement follows
a network-of-networks structure, which allows for connections at
different levels and is inclusive of many different types of entities
at those different levels, such as health information networks,
healthcare practices, hospitals, public health agencies, and Individual
Access Services (IAS) Providers.\10\ For more information, we refer
readers to <a href="https://www.healthit.gov/topic/interoperability/trusted-exchange-framework-and-common-agreement">https://www.healthit.gov/topic/interoperability/trusted-exchange-framework-and-common-agreement</a>.
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\7\ Public Law 114-255, sections 4001 through 4008. Available
at: <a href="https://www.govinfo.gov/content/pkg/PLAW-114publ255/html/PLAW-114publ255.htm">https://www.govinfo.gov/content/pkg/PLAW-114publ255/html/PLAW-114publ255.htm</a>.
\8\ The Trusted Exchange Framework (TEF): Principles for Trusted
Exchange (Jan. 2022). Available at: <a href="https://www.healthit.gov/sites/default/files/page/2022-01/Trusted_Exchange_Framework_0122.pdf">https://www.healthit.gov/sites/default/files/page/2022-01/Trusted_Exchange_Framework_0122.pdf</a>.
\9\ Common Agreement for Nationwide Health Information
Interoperability Version 1 (Jan. 2022). Available at: <a href="https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf">https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf</a>.
\10\ The Common Agreement defines Individual Access Services
(IAS) as ``with respect to the Exchange Purposes definition, the
services provided utilizing the Connectivity Services, to the extent
consistent with Applicable Law, to an Individual with whom the QHIN,
Participant, or Subparticipant has a Direct Relationship to satisfy
that Individual's ability to access, inspect, or obtain a copy of
that Individual's Required Information that is then maintained by or
for any QHIN, Participant, or Subparticipant.'' The Common Agreement
defines ``IAS Provider'' as: ``Each QHIN, Participant, and
Subparticipant that offers Individual Access Services.'' See Common
Agreement for Nationwide Health Information Interoperability Version
1, at 7 (Jan. 2022), <a href="https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf">https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf</a>.
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We invite providers to learn more about these important
developments and how they are likely to affect LTCHs.
Comment: A commenter expressed support for efforts across HHS to
advance health information technology exchange and encouraged use of a
standard set of data by providers and health IT vendors, including
efforts through the PACIO project. The commenter also noted a recent
National Academies report describing technology barriers for PAC
settings due to not being eligible for previous incentives to purchase
technology certified under the ONC Health IT Certification Program. The
commenter supported recommendations in the report for HHS to pursue
financial incentives for post-acute care settings to adopt certified
health information technology in order to enable health information
exchange.
Response: We will take this comment into consideration as we
coordinate with Federal partners, including ONC, on interoperability
initiatives, and to inform future rulemaking.
F. Use of FY 2021 Data and Methodology Modifications for the FY 2023
IPPS and LTCH PPS Ratesetting
We primarily use two data sources in the IPPS and LTCH PPS
ratesetting: claims data and cost report data. The claims data source
is the MedPAR file, which includes fully coded diagnostic and procedure
data for all Medicare inpatient hospital bills for discharges in a
fiscal year. The cost report data source is the Medicare hospital cost
report data files from the most recent quarterly Healthcare Cost Report
Information System (HCRIS) release. Our goal is always to use the best
available data overall for ratesetting. Ordinarily, the best available
MedPAR data is the most recent MedPAR file that contains claims from
discharges for the fiscal year that is 2 years prior to the fiscal year
that is the subject of the rulemaking. Ordinarily, the best available
cost report data is based on the cost reports beginning 3 fiscal years
prior to the fiscal year that is the subject of the rulemaking.
However, in the FY 2022 IPPS/LTCH PPS final rule (86 FR 44789 through
44793), as discussed in more detail below, we finalized our proposal to
use FY 2019 data for the FY 2022 ratesetting for circumstances where
the FY 2020 data (the most recently available data at the time of
rulemaking) was significantly impacted by the COVID-19 PHE.
As we discussed in the FY 2022 IPPS/LTCH PPS final rule, the FY
2020 MedPAR claims file and the FY 2019 HCRIS dataset both contained
data that was significantly impacted by the COVID-19 PHE, primarily in
that the utilization of services at IPPS hospitals and LTCHs was
generally markedly different for certain types of services in FY 2020
than would have been expected in the absence of the PHE. However, the
most recent vaccination and hospitalization data from the CDC at the
time of development of that rule supported our belief at the time that
the risk of COVID-19 in FY 2022 would be significantly lower than the
risk of COVID-19 in FY 2020 and there would be fewer COVID-19
hospitalizations for Medicare beneficiaries in FY 2022 than there were
in FY 2020. Therefore, we finalized our proposal to use FY 2019 data
for the FY 2022 ratesetting for circumstances where the FY 2020 data
was significantly impacted by the COVID-19 PHE, based on the belief
that FY 2019 data from before the COVID-19 PHE would be a better
overall approximation of the FY 2022 inpatient experience at both IPPS
hospitals and LTCHs. For example, we used the FY 2019 MedPAR claims
data for purposes where we ordinarily would have used the FY 2020
MedPAR claims data. We also used cost report data from the FY 2018
HCRIS file for purposes where we ordinarily would have used the FY 2019
HCRIS file (since the FY 2019 cost report data from HCRIS contained
many cost reports ending in FY 2020 based on each hospital's cost
reporting period).
Similar to our analysis of the FY 2020 MedPAR claims file and the
FY 2019 HCRIS dataset for the FY 2022 IPPS/LTCH PPS rulemaking, in the
FY 2023 IPPS/LTCH PPS proposed rule (87 FR 28123 through 28125) we
discussed that the FY 2021 MedPAR claims file and the FY 2020 HCRIS
dataset also both contain data that was significantly impacted by the
virus that causes COVID-19, primarily in that the utilization of
services at IPPS hospitals and LTCHs was again generally markedly
different for certain types of services in FY 2021 than would have been
expected in the absence of the virus that causes COVID-19.
Specifically, the share of admissions at IPPS hospitals and LTCHs for
MS-DRGs and MS-LTC-DRGs associated with the treatment of COVID-19
continued to remain significantly higher than levels prior to the
COVID-19 PHE. For example, in FY 2019, the share of IPPS cases and LTCH
PPS standard Federal payment rate cases grouped to MS-DRG and MS-LTC-
DRG 177 (Respiratory infections and inflammations with MCC) was
approximately 1 percent and 2 percent, respectively. In comparison, in
FY 2021, the share of IPPS cases and LTCH PPS standard Federal payment
rate cases grouped to MS-DRG 177 was approximately 6 percent and 8
percent, respectively.
In the FY 2023 IPPS/LTCH PPS proposed rule (87 FR 28123 through
28124), we reviewed the most recent data from the CDC on new inpatient
hospital admissions of patients with confirmed COVID-19. We presented
this CDC graph which illustrates new inpatient hospital admissions of
patients with confirmed COVID-19 from August 1, 2020 through February
15, 2022 (<a href="https://www.cdc.gov/coronavirus/2019-ncov/covid-data/covidview/02182022/images/hospitalizations_02182022.jpg?_=35767">https://www.cdc.gov/coronavirus/2019-ncov/covid-data/covidview/02182022/images/hospitalizations_02182022.jpg?_=35767</a>,
accessed February 22, 2022).
[[Page 48796]]
[GRAPHIC] [TIFF OMITTED] TR10AU22.003
We stated that the low point of the graph (late June 2021)
approximately coincides with the time of the development of the FY 2022
IPPS/LTCH PPS final rule and generally supports, in conjunction with
the other factors discussed in that rulemaking (including the most
recent vaccination data from the CDC), our assumption in the final rule
that the FY 2022 time period would be more similar to the time period
prior to the PHE. We stated that the graph also shows that the virus
that causes COVID-19 has continued to significantly impact
hospitalizations for the time period subsequent to the development of
the FY 2022 IPPS/LTCH PPS final rule.
In the FY 2023 IPPS/LTCH PPS proposed rule (87 FR 28124), we also
presented information from the CDC on the likelihood of future COVID-19
variants. We noted that the most recent increase in hospitalizations
was primarily associated with the Omicron variant of the virus \11\ and
that the CDC has stated that new variants will continue to emerge.
Viruses constantly change through mutation and sometimes these
mutations result in a new variant of the virus. The CDC and other
public health organizations monitor all variants of the virus that
causes COVID-19 in the United States and globally. Scientists monitor
all variants but may classify certain ones as variants being monitored,
variants of interest, variants of concern and variants of high
consequence. Some variants spread more easily and quickly than other
variants, which may lead to more cases of COVID-19. Even if a variant
causes less severe disease in general, an increase in the overall
number of cases could cause an increase in hospitalizations (see
<a href="https://www.cdc.gov/coronavirus/2019-ncov/variants/about-variants.html">https://www.cdc.gov/coronavirus/2019-ncov/variants/about-variants.html</a>,
accessed February 25, 2022).
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\11\ <a href="https://www.cdc.gov/coronavirus/2019-ncov/variants/omicron-variant.html">https://www.cdc.gov/coronavirus/2019-ncov/variants/omicron-variant.html</a>.
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Given the effects of the virus that causes COVID-19 in the Medicare
FY 2020 data, the Medicare FY 2021 data, and the CDC hospitalization
data, coupled with the expectation for future variants, in the proposed
rule we stated our belief that it is reasonable to assume that some
Medicare beneficiaries will continue to be hospitalized with COVID-19
at IPPS hospitals and LTCHs in FY 2023. Accordingly, we stated that we
believe it would be appropriate to use FY 2021 data, specifically the
FY 2021 MedPAR claims file and the FY 2020 HCRIS dataset (which
contains data from many cost reports ending in FY 2021 based on each
hospital's cost reporting period) as the most recent available data
during the period of the COVID-19 PHE, for purposes of the FY 2023 IPPS
and LTCH PPS ratesetting. However, we also stated our belief that it
would be reasonable to assume based on the information available at the
time that there will be fewer COVID-19 hospitalizations in FY 2023 than
in FY 2021 given the more recent trends in the CDC hospitalization data
since the Omicron variant peak in January, 2022. Accordingly, because
we anticipated Medicare inpatient hospitalizations for COVID-19 would
continue in FY 2023 but at a lower level, we proposed to use FY 2021
data for purposes of the FY 2023 IPPS and LTCH PPS ratesetting but with
modifications to our usual ratesetting methodologies to account for the
anticipated decline in COVID-19 hospitalizations of Medicare
beneficiaries at IPPS hospitals and LTCHs as compared to FY 2021.
First, we proposed to modify the calculation of the FY 2023 MS-DRG
and MS-LTC-DRG relative weights. We observed that COVID-19 cases were
impacting the relative weights as calculated using the FY 2021 MedPAR
data for a few COVID-19-related MS-DRGs and MS-LTC-DRGs. As an example,
for MS-DRG and MS-LTC-DRG 870 (Septicemia or Severe Sepsis with MV >96
hours), the MS-DRG and MS-LTC-DRG relative weights calculated using the
FY 2021 MedPAR data are approximately 9 and 3 percent higher,
respectively, compared to their relative weights if calculated
excluding COVID-19 cases. Because this MS-DRG contains a mix of COVID-
19 cases and non-COVID-19 cases with different average costs, the
relative weight for this MS-DRG is dependent on that mix of cases. As
stated in the proposed rule, we believed it is reasonable to assume
that there would be fewer COVID-19 hospitalizations among Medicare
beneficiaries in FY 2023 than there were in FY 2021; however, we also
stated that it is not possible to know precisely how COVID-19
hospitalizations in FY 2023 will compare to FY 2021. We stated our
belief that averaging the relative weights as calculated with and
without the COVID-19 cases reflected in the FY 2021 MedPAR data would
reflect a reasonable estimation of the case mix for FY 2023 based on
the information available at the time, and more accurately estimate the
relative resource use for the cases treated in FY 2023. Therefore, we
proposed to calculate the relative weights for FY 2023 by first
calculating two sets of weights, one including and one excluding COVID-
19 claims, and then averaging the two sets of relative weights to
determine the proposed FY 2023 relative weight values. We believed this
proposed modification to our relative weight setting methodology would
appropriately reduce, but not remove entirely, the effect of COVID-19
cases
[[Page 48797]]
on the relative weight calculations, consistent with our expectation
that Medicare inpatient hospitalizations for COVID-19 will continue in
FY 2023 at a lower level as compared to FY 2021, and provide a more
accurate estimate of relative resource use for FY 2023 than if we were
to calculate the proposed relative weights using all applicable cases
in the FY 2021 data.
We also proposed to modify our methodologies for determining the FY
2023 outlier fixed-loss amount for IPPS cases and LTCH PPS standard
Federal payment rate cases. The methodologies for determining both of
these outlier fixed-loss amounts include calculating and applying a
charge inflation factor to increase charges from the claim year to the
rulemaking year, as well as calculating and applying cost-to-charge
ratio (CCR) adjustment factors to adjust CCRs used to make payments in
the current year to the rulemaking year. The charge inflation factors
calculated using the 2 most recently available years of MedPAR claims
data (FY 2020 and FY 2021) that would ordinarily be used for the FY
2023 proposed rule to inflate the charges on the FY 2021 MedPAR claims
were abnormally high as compared to recent historical levels prior to
the PHE (for example, for the IPPS, approximately 10 percent based on
the FY 2020 and FY 2021 MedPAR claims data as compared to approximately
6 percent based on the FY 2018 and FY 2019 MedPAR claims data).
Furthermore, the IPPS operating and capital CCR adjustment factors
calculated based on the percentage changes in the CCRs from the
December 2020 update of the Provider Specific File (PSF) to the
December 2021 update of the PSF that would ordinarily be used for the
FY 2023 proposed rule to adjust the CCRs from the December 2021 update
of the PSF were also abnormally high as compared to recent historical
levels prior to the PHE (for example, for the IPPS operating CCR
adjustment factor, a factor of approximately 1.03 based on the December
2020 and December 2021 updates to the PSF as compared to a factor of
approximately 0.97 based on the March 2019 and March 2020 updates to
the PSF). In the proposed rule, we stated our belief that these
abnormally high charge inflation and CCR adjustment factors as compared
to historical levels were partially due to the high number of COVID-19
cases with higher charges that were treated in IPPS hospitals and LTCHs
in FY 2021. We also stated our belief that there will be fewer COVID-19
cases in FY 2023 than in FY 2021 and that therefore, we do not believe
it is reasonable to assume charges and CCRs will continue to increase
at these abnormally high rates. Consequently, when determining the FY
2023 outlier fixed-loss amounts for IPPS cases and LTCH PPS standard
Federal payment rate cases, we proposed to inflate the charges on the
FY 2021 MedPAR claims using charge inflation factors computed by
comparing the average covered charge per case in the March 2019 MedPAR
file of FY 2018 to the average covered charge per case in the March
2020 MedPAR file of FY 2019, which is the last 1-year period prior to
the COVID-19 PHE. We also proposed to adjust the CCRs from the December
2021 update of the PSF by comparing the percentage change in the
national average case-weighted CCR from the March 2019 update of the
PSF to the national average case-weighted CCR from the March 2020
update of the PSF, which is the last 1-year period prior to the COVID-
19 PHE. We stated our belief that using the charge inflation factors
and CCR adjustment factors derived from data prior to the COVID-19 PHE
would provide a more reasonable approximation of the increase in costs
that will occur from FY 2021 to FY 2023 because we do not believe the
charge inflation that has occurred during the PHE will continue as the
number of higher cost COVID-19 cases declines.
In the FY 2023 IPPS/LTCH PPS proposed rule (87 FR 28740 through
28741) we also requested comments on, as an alternative to our proposed
approach, the use of the FY 2021 data for purposes of FY 2023
ratesetting without these proposed modifications to our usual
methodologies for the calculation of the FY 2023 MS-DRG and MS-LTC-DRG
relative weights or the usual methodologies used to determine the FY
2023 outlier fixed-loss amount for IPPS cases and LTCH PPS standard
Federal payment rate cases. We noted that the FY 2023 outlier fixed-
loss amount would be significantly higher under this alternative
approach. In order to illustrate the effect of our proposed
modifications on the relative weights and fixed loss amount, we made
available supplemental information, including the relative weights and
fixed-loss amount calculated without the proposed modifications to our
usual methodologies.
The comments we received on our proposal to use FY 2021 data for
purposes of the FY 2023 IPPS and LTCH PPS ratesetting were focused on
the specific use of FY 2021 data when determining the FY 2023 relative
weights or outlier fixed-loss amounts. Therefore, we refer the reader
to section II.E. of the preamble of this final rule for our summary and
response to comments received on our proposed use of FY 2021 data and
our proposed modifications to our usual methodology when determining
the FY 2023 IPPS MS-DRG relative weights. We refer the reader to
section VIII.B. of the preamble of this final rule for our summary and
response to comments received on our proposed use of FY 2021 data and
our proposed modifications to our usual methodology when determining
the FY 2023 LTCH PPS MS-LTC-DRG relative weights. We refer the reader
to section II.A.4. of the addendum to this final rule for our summary
and response to comments received on our proposed use of FY 2021 data
and our proposed modifications to our usual methodology when
determining the FY 2023 outlier fixed-loss amounts for IPPS cases. We
refer the reader to section V.D.3. of the Addendum to this final rule
for our summary and response to comments received on our proposed use
of FY 2021 data and our proposed modifications to our usual methodology
when determining the FY 2023 outlier fixed-loss amounts for LTCH PPS
standard Federal payment rate cases.
Since the publication of the proposed rule, we have continued to
monitor hospitalization data reported by the CDC. This CDC graph
illustrates new inpatient hospital admissions of patients with
confirmed COVID-19 from August 1, 2020 through July 6, 2022 (<a href="https://www.cdc.gov/coronavirus/2019-ncov/covid-data/covidview/07082022/images/Hospitalizations.png?_=90548">https://www.cdc.gov/coronavirus/2019-ncov/covid-data/covidview/07082022/images/Hospitalizations.png?_=90548</a>, accessed July 08, 2022).
[[Page 48798]]
[GRAPHIC] [TIFF OMITTED] TR10AU22.004
The graph shows that new COVID-19 hospital admissions reached a low
point in early April 2022, however have steadily increased since.
After reviewing the latest CDC hospitalization data, coupled with
the expectation for future variants,\12\ we continue to believe that it
is reasonable to assume that some Medicare beneficiaries will continue
to be hospitalized with COVID-19 at IPPS hospitals and LTCHs in FY
2023. We also continue to believe that it would be reasonable to assume
based on the information available at this time that there will be
fewer COVID-19 hospitalizations in FY 2023 than in FY 2021 given that
the current levels of hospitalizations are much lower than the Omicron
variant peak in January 2022.
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\12\ <a href="https://www.cdc.gov/coronavirus/2019-ncov/variants/about-variants.html">https://www.cdc.gov/coronavirus/2019-ncov/variants/about-variants.html</a>.
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Therefore, after considering the comments received and based on our
evaluation of the information available at this time, we are finalizing
our proposal to use FY 2021 data for purposes of the FY 2023 IPPS and
LTCH PPS ratesetting. (That is, the FY 2021 MedPAR claims file and the
FY 2020 HCRIS dataset (which contains data from many cost reports
ending in FY 2021 based on each hospital's cost reporting period).) We
are also finalizing, as proposed, modifications to our usual
methodology for determining the FY 2023 IPPS MS-DRG relative weights
and FY 2023 LTCH PPS MS-LTC-DRG relative weights. Specifically, for FY
2023, we calculated the relative weights by first calculating two sets
of weights, one including and one excluding COVID-19 claims, and then
averaging the two sets of relative weights to determine the final
relative weight values. The finalization of our proposal to use FY 2021
data and to modify our methodology for determining the FY 2023 IPPS MS-
DRG relative weights is discussed in greater detail in section II.E. of
the preamble of this final rule. The finalization of our proposal to
use FY 2021 data and to modify our methodology for determining the FY
2023 LTCH PPS MS-LTC-DRG relative weights is discussed in greater
detail in section VIII.B. of the preamble of this final rule.
As discussed in section II.A.4. and section V.D.3. of the addendum
to this final rule, we received many comments supportive of our
proposed modifications to our usual methodologies for determining the
FY 2023 IPPS and LTCH PPS outlier fixed-loss amounts. As discussed in
these sections, after considering comments received, we are finalizing
our proposal to inflate the charges on the FY 2021 MedPAR claims using
charge inflation factors computed by comparing the average covered
charge per case in the March 2019 MedPAR file of FY 2018 to the average
covered charge per case in the March 2020 MedPAR file of FY 2019, which
is the last 1-year period prior to the COVID-19 PHE. We are also
finalizing our proposal to adjust the CCRs from the March 2021 update
of the PSF by comparing the percentage change in the national average
case-weighted CCR from the March 2019 update of the PSF to the national
average case-weighted CCR from the March 2020 update of the PSF, which
is the last 1-year period prior to the COVID-19 PHE.
We also received many comments that suggested other modifications
CMS should make to our usual methodologies for determining the FY 2023
IPPS and LTCH PPS outlier fixed-loss amounts. As also discussed in
section II.A.4. and section V.D.3. of the addendum to this final rule,
after consideration of the comments received, we are modifying our
proposed methodologies for establishing the FY 2023 IPPS and LTCH PPS
outlier fixed-loss amounts by calculating the FY 2023 IPPS and LTCH PPS
outlier fixed-loss amounts as averages of the fixed-loss amounts as
calculated including and excluding COVID-19 claims. We believe this
adjustment to our proposed methodology will better reflect a reasonable
estimation of the case mix for FY 2023 based on the information
available at this time and is also consistent with the approach we are
finalizing for determining the FY 2023 IPPS MS-DRG and LTCH PPS MS-LTC-
DRG relative weights.
In addition, as discussed in section II.A.4. of the Addendum to
this final rule, after consideration of comments received, we are also
further modifying our proposed methodology for establishing the FY 2023
IPPS outlier fixed-loss amount by including the increases in payments
for COVID-19 cases provided by the CARES Act in the calculation of the
outlier fixed-loss amount.
II. Changes to Medicare Severity Diagnosis-Related Group (MS-DRG)
Classifications and Relative Weights
A. Background
Section 1886(d) of the Act specifies that the Secretary shall
establish a classification system (referred to as diagnosis-related
groups (DRGs)) for inpatient discharges and adjust payments under the
IPPS based on appropriate weighting factors assigned to each DRG.
Therefore, under the IPPS, Medicare pays for inpatient hospital
services on a rate per discharge basis that varies according to the DRG
to which a beneficiary's stay is assigned. The formula used to
calculate payment
[[Page 48799]]
for a specific case multiplies an individual hospital's payment rate
per case by the weight of the DRG to which the case is assigned. Each
DRG weight represents the average resources required to care for cases
in that particular DRG, relative to the average resources used to treat
cases in all DRGs.
Section 1886(d)(4)(C) of the Act requires that the Secretary adjust
the DRG classifications and relative weights at least annually to
account for changes in resource consumption. These adjustments are made
to reflect changes in treatment patterns, technology, and any other
factors that may change the relative use of hospital resources.
B. Adoption of the MS-DRGs and MS-DRG Reclassifications
For information on the adoption of the MS-DRGs in FY 2008, we refer
readers to the FY 2008 IPPS final rule with comment period (72 FR 47140
through 47189).
For general information about the MS-DRG system, including yearly
reviews and changes to the MS-DRGs, we refer readers to the previous
discussions in the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR
43764 through 43766) and the FYs 2011 through 2022 IPPS/LTCH PPS final
rules (75 FR 50053 through 50055; 76 FR 51485 through 51487; 77 FR
53273; 78 FR 50512; 79 FR 49871; 80 FR 49342; 81 FR 56787 through
56872; 82 FR 38010 through 38085, 83 FR 41158 through 41258, 84 FR
42058 through 42165, 85 FR 58445 through 58596, 86 FR 44795 through
44961, respectively).
C. FY 2023 MS-DRG Documentation and Coding Adjustment
1. Background on the Prospective MS-DRG Documentation and Coding
Adjustments for FY 2008 and FY 2009 Authorized by Pub. L. 110-90 and
the Recoupment or Repayment Adjustment Authorized by Section 631 of the
American Taxpayer Relief Act of 2012 (ATRA).
In the FY 2008 IPPS final rule with comment period (72 FR 47140
through 47189), we adopted the MS-DRG patient classification system for
the IPPS, effective October 1, 2007, to better recognize severity of
illness in Medicare payment rates for acute care hospitals. The
adoption of the MS-DRG system resulted in the expansion of the number
of DRGs from 538 in FY 2007 to 745 in FY 2008. By increasing the number
of MS-DRGs and more fully taking into account patient severity of
illness in Medicare payment rates for acute care hospitals, MS-DRGs
encourage hospitals to improve their documentation and coding of
patient diagnoses.
In the FY 2008 IPPS final rule with comment period (72 FR 47175
through 47186), we indicated that the adoption of the MS-DRGs had the
potential to lead to increases in aggregate payments without a
corresponding increase in actual patient severity of illness due to the
incentives for additional documentation and coding. In that final rule
with comment period, we exercised our authority under section
1886(d)(3)(A)(vi) of the Act, which authorizes us to maintain budget
neutrality by adjusting the national standardized amount, to eliminate
the estimated effect of changes in coding or classification that do not
reflect real changes in case-mix. Our actuaries estimated that
maintaining budget neutrality required an adjustment of -4.8 percentage
points to the national standardized amount. We provided for phasing in
this -4.8 percentage point adjustment over 3 years. Specifically, we
established prospective documentation and coding adjustments of -1.2
percentage points for FY 2008, -1.8 percentage points for FY 2009, and
-1.8 percentage points for FY 2010.
On September 29, 2007, Congress enacted the TMA [Transitional
Medical Assistance], Abstinence Education, and QI [Qualifying
Individuals] Programs Extension Act of 2007 (Pub. L. 110-90). Section
7(a) of Public Law 110-90 reduced the documentation and coding
adjustment made as a result of the MS-DRG system that we adopted in the
FY 2008 IPPS final rule with comment period to -0.6 percentage point
for FY 2008 and -0.9 percentage point for FY 2009.
As discussed in prior year rulemakings, and most recently in the FY
2017 IPPS/LTCH PPS final rule (81 FR 56780 through 56782), we
implemented a series of adjustments required under sections 7(b)(1)(A)
and 7(b)(1)(B) of Public Law 110-90, based on a retrospective review of
FY 2008 and FY 2009 claims data. We completed these adjustments in FY
2013 but indicated in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53274
through 53275) that delaying full implementation of the adjustment
required under section 7(b)(1)(A) of Public Law 110-90 until FY 2013
resulted in payments in FY 2010 through FY 2012 being overstated, and
that these overpayments could not be recovered under Public Law 110-90.
In addition, as discussed in prior rulemakings and most recently in
the FY 2018 IPPS/LTCH PPS final rule (82 FR 38008 through 38009),
section 631 of the American Taxpayer Relief Act of 2012 (ATRA) amended
section 7(b)(1)(B) of Public Law 110-90 to require the Secretary to
make a recoupment adjustment or adjustments totaling $11 billion by FY
2017. This adjustment represented the amount of the increase in
aggregate payments as a result of not completing the prospective
adjustment authorized under section 7(b)(1)(A) of Public Law 110-90
until FY 2013.
2. Adjustments Made for FYs 2018, 2019, 2020, 2021, and 2022 as
Required Under Section 414 of Public Law 114-10 (MACRA) and Section
15005 of Public Law 114-255
As stated in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56785),
once the recoupment required under section 631 of the ATRA was
complete, we had anticipated making a single positive adjustment in FY
2018 to offset the reductions required to recoup the $11 billion under
section 631 of the ATRA. However, section 414 of the MACRA (which was
enacted on April 16, 2015) replaced the single positive adjustment we
intended to make in FY 2018 with a 0.5 percentage point positive
adjustment for each of FYs 2018 through 2023. In the FY 2017
rulemaking, we indicated that we would address the adjustments for FY
2018 and later fiscal years in future rulemaking. Section 15005 of the
21st Century Cures Act (Pub. L. 114-255), which was enacted on December
13, 2016, amended section 7(b)(1)(B) of the TMA, as amended by section
631 of the ATRA and section 414 of the MACRA, to reduce the adjustment
for FY 2018 from a 0.5 percentage point positive adjustment to a 0.4588
percentage point positive adjustment. As we discussed in the FY 2018
rulemaking, we believe the directive under section 15005 of Public Law
114-255 is clear. Therefore, in the FY 2018 IPPS/LTCH PPS final rule
(82 FR 38009) for FY 2018, we implemented the required +0.4588
percentage point adjustment to the standardized amount. In the FY 2019
IPPS/LTCH PPS final rule (83 FR 41157), the FY 2020 IPPS/LTCH PPS final
rule (84 FR 42057), the FY 2021 IPPS/LTCH PPS final rule (85 FR 58444
and 58445), and the FY 2022 IPPS/LTCH PPS final rule (86 FR 44794 and
44795), consistent with the requirements of section 414 of the MACRA,
we implemented 0.5 percentage point positive adjustments to the
standardized amount for FY 2019, FY 2020, FY 2021, and FY 2022,
respectively. We indicated the FY 2018, FY 2019, FY 2020, FY 2021, and
FY 2022 adjustments were permanent adjustments to payment rates. We
also
[[Page 48800]]
stated that we plan to propose a future adjustment required under
section 414 of the MACRA for FY 2023 in future rulemaking.
3. Adjustment for FY 2023
Consistent with the requirements of section 414 of the MACRA, we
proposed to implement a 0.5 percentage point positive adjustment to the
standardized amount for FY 2023. We stated that this would constitute a
permanent adjustment to payment rates. We also stated that this
proposed 0.5 percentage point positive adjustment is the final
adjustment prescribed by section 414 of the MACRA. Along with the
0.4588 percentage point positive adjustment for FY 2018, and the 0.5
percentage point positive adjustments for FY 2019, FY 2020, FY 2021,
and FY 2022, this final adjustment will result in combined positive
adjustment of 2.9588 percentage points (or the sum of the adjustments
for FYs 2018 through 2023) to the standardized amount.
We received no public comments on the proposed adjustment for FY
2023 and are finalizing our proposal to implement a 0.5 percentage
point positive adjustment to the standardized amount for FY 2023. As
indicated, this finalized 0.5 percentage point positive adjustment for
FY 2023 is the final adjustment prescribed by section 414 of the MACRA.
D. Changes to Specific MS-DRG Classifications
1. Discussion of Changes to Coding System and Basis for FY 2023 MS-DRG
Updates
a. Conversion of MS-DRGs to the International Classification of
Diseases, 10th Revision (ICD-10)
As of October 1, 2015, providers use the International
Classification of Diseases, 10th Revision (ICD-10) coding system to
report diagnoses and procedures for Medicare hospital inpatient
services under the MS-DRG system instead of the ICD-9-CM coding system,
which was used through September 30, 2015. The ICD-10 coding system
includes the International Classification of Diseases, 10th Revision,
Clinical Modification (ICD-10-CM) for diagnosis coding and the
International Classification of Diseases, 10th Revision, Procedure
Coding System (ICD-10-PCS) for inpatient hospital procedure coding, as
well as the ICD-10-CM and ICD-10-PCS Official Guidelines for Coding and
Reporting. For a detailed discussion of the conversion of the MS-DRGs
to ICD-10, we refer readers to the FY 2017 IPPS/LTCH PPS final rule (81
FR 56787 through 56789).
b. Basis for FY 2023 MS-DRG Updates
Given the need for more time to carefully evaluate requests and
propose updates, as discussed in the FY 2018 IPPS/LTCH PPS final rule
(82 FR 38010), we changed the deadline to request updates to the MS-
DRGs to November 1 of each year, which provided an additional five
weeks for the data analysis and review process. In the FY 2021 IPPS/
LTCH PPS proposed rule (85 FR 32472), we stated that with the continued
increase in the number and complexity of the requested changes to the
MS-DRG classifications since the adoption of ICD-10 MS-DRGs, and to
consider as many requests as possible, more time is needed to carefully
evaluate the requested changes, analyze claims data, and consider any
proposed updates. We further stated we were changing the deadline to
request changes to the MS-DRGs to October 20 of each year to allow for
additional time for the review and consideration of any proposed
updates. However, in the FY 2021 IPPS/LTCH PPS final rule (85 FR
58445), due to the unique circumstances for the FY 2021 IPPS/LTCH PPS
final rule for which we waived the delayed effective date, we
maintained the deadline of November 1, 2020 for FY 2022 MS-DRG
classification change requests. We also noted that we expected to
reconsider a change in the deadline beginning with comments and
suggestions submitted for FY 2023. In the FY 2022 IPPS/LTCH PPS
proposed rule, we stated that while we continue to believe that a
change in the deadline from November 1 to October 20 would provide
hospitals sufficient time to assess potential impacts and inform future
MS-DRG recommendations, we were maintaining the deadline of November 1
for FY 2023 MS-DRG classification change requests. As discussed in the
FY 2022 IPPS/LTCH PPS final rule (86 FR 44795), we received public
comments expressing support for a future change to the deadline for
requesting updates to the MS-DRG classifications from November 1 to
October 20, and we noted in response that we may consider any changes
to the deadline or frequency for submissions of requests for MS-DRG
classification changes for future fiscal years. Beginning with FY 2024
MS-DRG classification change requests, we are changing the deadline to
request changes to the MS-DRGs to October 20 of each year to allow for
additional time for the review and consideration of any proposed
updates. As previously discussed, we continue to believe such a change
would allow hospitals sufficient time to assess potential impacts and
inform future MS-DRG recommendations, while also providing CMS the
additional time needed for evaluation of the requested changes,
analysis of claims data, and consideration of any proposed updates.
As discussed in the FY 2023 IPPS/LTCH PPS proposed rule, we are
also changing the process for submitting requested updates to the MS-
DRG classifications, beginning with the FY 2024 MS-DRG classification
change requests. CMS is in the process of implementing a new electronic
application intake system, Medicare Electronic Application Request
Information System<SUP>TM</SUP> (MEARIS\TM\), for users to submit new
technology add-on payment applications, requests for ICD-10-PCS
procedure codes, and other requests. To simplify and streamline the
process for submission of standardized applications and requests that
inform payment policy under the IPPS, we will also be using this new
system for submission of MS-DRG classification change requests. We
believe that submission of MS-DRG reclassification requests through
MEARIS\TM\ will not only help CMS to track such requests, but it will
also create efficiencies for requestors when compared to the previous
submission process.
Accordingly, beginning with the FY 2024 MS-DRG classification
change requests, CMS will only accept such requests submitted via
MEARIS,\TM\ and will no longer consider any such requests that are sent
via email. We note that, beginning April 5, 2022, MEARIS\TM\ became
available for users to begin gaining familiarity with this new approach
for submitting MS-DRG classification change requests. MEARIS,\TM\
including the mechanism for submitting MS-DRG classification change
requests, can be accessed at: <a href="https://mearis.cms.gov">https://mearis.cms.gov</a>. As stated in the
proposed rule, within MEARIS\TM\ we have built in several resources to
support users, including a ``Resources'' section (available at <a href="https://mearis.cms.gov/public/resources">https://mearis.cms.gov/public/resources</a>) and technical support available under
``Useful Links'' at the bottom of the MEARIS\TM\ site. Questions
regarding the MEARIS\TM\ system can be submitted to CMS using the form
available under ``Contact'' at: <a href="https://mearis.cms.gov/public/resources">https://mearis.cms.gov/public/resources</a>?app=msdrg.
We also note that, as discussed in section II.D.17. of the preamble
of the proposed rule and this final rule, effective January 5, 2022,
MEARIS\TM\ was made available for users to begin gaining familiarity
with a new approach
[[Page 48801]]
and process to submit ICD-10-PCS procedure code requests.
As noted previously, interested parties had to submit MS-DRG
classification change requests for FY 2023 by November 1, 2021. As we
have discussed in prior rulemaking, we may not be able to fully
consider all of the requests that we receive for the upcoming fiscal
year. We have found that, with the implementation of ICD-10, some types
of requested changes to the MS-DRG classifications require more
extensive research to identify and analyze all of the data that are
relevant to evaluating the potential change. We note in the discussion
that follows those topics for which further research and analysis are
required, and which we will continue to consider in connection with
future rulemaking. Interested parties should submit any comments and
suggestions for FY 2024 by October 20, 2022 via the new electronic
intake system, Medicare Electronic Application Request Information
System<SUP>TM</SUP> (MEARIS<SUP>TM</SUP>) at: <a href="https://mearis.cms.gov/public/home">https://mearis.cms.gov/public/home</a>.
We provided a test version of the ICD-10 MS-DRG GROUPER Software,
Version 40, in connection with the FY 2023 IPPS/LTCH PPS proposed rule
so that the public can better analyze and understand the impact of the
proposals included in the proposed rule. We noted that this test
software reflected the proposed GROUPER logic for FY 2023. Therefore,
it included the new diagnosis and procedure codes that are effective
for FY 2023 as reflected in Table 6A.--New Diagnosis Codes--FY 2023 and
Table 6B.--New Procedure Codes--FY 2023 that were associated with the
proposed rule and did not include the diagnosis codes that are invalid
beginning in FY 2023 as reflected in Table 6C.--Invalid Diagnosis
Codes--FY 2023 associated with the proposed rule. We noted that at the
time of the development of the proposed rule there were no procedure
codes designated as invalid for FY 2023, and therefore, there was no
Table 6D--Invalid Procedure Codes--FY 2023 associated with the proposed
rule. Those tables were not published in the Addendum to the proposed
rule, but are available via the internet on the CMS website at: <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index</a>.html as described in section VI. of the
Addendum to the proposed rule. Because the diagnosis codes no longer
valid for FY 2023 are not reflected in the test software, we made
available a supplemental file in Table 6P.1a that includes the mapped
Version 40 FY 2023 ICD-10-CM codes and the deleted Version 39.1 FY 2022
ICD-10-CM codes that should be used for testing purposes with users'
available claims data. Therefore, users had access to the test software
allowing them to build case examples that reflect the proposals that
were included in the proposed rule. In addition, users were able to
view the draft version of the ICD-10 MS-DRG Definitions Manual, Version
40.
The test version of the ICD-10 MS-DRG GROUPER Software, Version 40,
the draft version of the ICD-10 MS-DRG Definitions Manual, Version 40,
and the supplemental mapping files in Table 6P.1a of the FY 2022 and FY
2023 ICD-10-CM diagnosis codes are available at <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software</a>.
Following are the changes that we proposed to the MS-DRGs for FY
2023. We invited public comments on each of the MS-DRG classification
proposed changes, as well as our proposals to maintain certain existing
MS-DRG classifications discussed in the proposed rule. In some cases,
we proposed changes to the MS-DRG classifications based on our analysis
of claims data and consultation with our clinical advisors. In other
cases, we proposed to maintain the existing MS-DRG classifications
based on our analysis of claims data and consultation with our clinical
advisors. As discussed in section I.F of the preamble of the proposed
rule, we proposed to use the FY 2021 MedPAR data for purposes of this
FY 2023 IPPS rulemaking, with certain proposed modifications to the
relative weight and outlier methodologies. For the FY 2023 IPPS/LTCH
PPS proposed rule, our MS-DRG analysis was based on ICD-10 claims data
from the September 2021 update of the FY 2021 MedPAR file, which
contains hospital bills received from October 1, 2020 through September
30, 2021, for discharges occurring through September 30, 2021. In our
discussion of the proposed MS-DRG reclassification changes, we referred
to these claims data as the ``September 2021 update of the FY 2021
MedPAR file.''
In this FY 2023 IPPS/LTCH PPS final rule, we summarize the public
comments we received on our proposals, present our responses, and state
our final policies. For this FY 2023 final rule, we generally did not
perform any further MS-DRG analysis of claims data. Therefore, the MS-
DRG analysis is based on ICD-10 claims data from the September 2021
update of the FY 2021 MedPAR file, as set forth in the proposed rule,
except as otherwise noted.
As explained in previous rulemaking (76 FR 51487), in deciding
whether to propose to make further modifications to the MS-DRGs for
particular circumstances brought to our attention, we consider whether
the resource consumption and clinical characteristics of the patients
with a given set of conditions are significantly different than the
remaining patients represented in the MS-DRG. We evaluate patient care
costs using average costs and lengths of stay and rely on the judgment
of our clinical advisors to determine whether patients are clinically
distinct or similar to other patients represented in the MS-DRG. In
evaluating resource costs, we consider both the absolute and percentage
differences in average costs between the cases we select for review and
the remainder of cases in the MS-DRG. We also consider variation in
costs within these groups; that is, whether observed average
differences are consistent across patients or attributable to cases
that are extreme in terms of costs or length of stay, or both. Further,
we consider the number of patients who will have a given set of
characteristics and generally prefer not to create a new MS-DRG unless
it would include a substantial number of cases.
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58448), we finalized
our proposal to expand our existing criteria to create a new
complication or comorbidity (CC) or major complication or comorbidity
(MCC) subgroup within a base MS-DRG. Specifically, we finalized the
expansion of the criteria to include the NonCC subgroup for a three-way
severity level split. We stated our belief that applying these criteria
to the NonCC subgroup would better reflect resource stratification as
well as promote stability in the relative weights by avoiding low
volume counts for the NonCC level MS-DRGs. We noted that in our
analysis of MS-DRG classification requests for FY 2021 that were
received by November 1, 2019, as well as any additional analyses that
were conducted in connection with those requests, we applied these
criteria to each of the MCC, CC, and NonCC subgroups. We also noted
that the application of the NonCC subgroup criteria going forward may
result in modifications to certain MS-DRGs that are currently split
into three severity levels and result in MS-DRGs that are split into
two severity levels. We stated that any proposed modifications to the
MS-DRGs would be addressed in future rulemaking consistent with our
annual process and reflected in Table 5--Proposed List of Medicare
Severity Diagnosis Related Groups (MS-DRGs),
[[Page 48802]]
Relative Weighting Factors, and Geometric and Arithmetic Mean Length of
Stay for the applicable fiscal year.
In the FY 2022 IPPS/LTCH PPS final rule (86 FR 44798), we finalized
a delay in applying this technical criterion to existing MS-DRGs until
FY 2023 or future rulemaking, in light of the PHE. Commenters
recommended that a complete analysis of the MS-DRG changes to be
proposed for future rulemaking in connection with the expanded three-
way severity split criteria be conducted and made available to enable
the public an opportunity to review and consider the redistribution of
cases, the impact to the relative weights, payment rates, and hospital
case mix to allow meaningful comment prior to implementation.
In our analysis of the MS-DRG classification requests for FY 2023
that we received by November 1, 2021, as well as any additional
analyses that were conducted in connection with those requests, we
applied these criteria to each of the MCC, CC, and NonCC subgroups, as
described in the following table.
[GRAPHIC] [TIFF OMITTED] TR10AU22.005
In general, once the decision has been made to propose to make
further modifications to the MS-DRGs as described previously, such as
creating a new base MS-DRG, or in our evaluation of a specific MS-DRG
classification request to split (or subdivide) an existing base MS-DRG
into severity levels, all five criteria must be met for the base MS-DRG
to be split (or subdivided) by a CC subgroup. We note that in our
analysis of requests to create a new MS-DRG, we typically evaluate the
most recent year of MedPAR claims data available. For example, in the
FY 2023 IPPS/LTCH PPS proposed rule we stated our MS-DRG analysis was
based on ICD-10 claims data from the September 2021 update of the FY
2021 MedPAR file. However, in our evaluation of requests to split an
existing base MS-DRG into severity levels, as noted in prior rulemaking
(80 FR 49368), we typically analyze the most recent 2 years of data.
This analysis includes 2 years of MedPAR claims data to compare the
data results from 1 year to the next to avoid making determinations
about whether additional severity levels are warranted based on an
isolated year's data fluctuation and also, to validate that the
established severity levels within a base MS-DRG are supported. The
first step in our process of evaluating if the creation of a new CC
subgroup within a base MS-DRG is warranted is to determine if all the
criteria are satisfied for a three-way split. If the criteria fail, the
next step is to determine if the criteria are satisfied for a two-way
split. If the criteria for both of the two-way splits fail, then a
split (or CC subgroup) would generally not be warranted for that base
MS-DRG. If the three-way split fails on any one of the five criteria
and all five criteria for both two-way splits (1_23 and 12_3) are met,
we would apply the two-way split with the highest R2 value. We note
that if the request to split (or subdivide) an existing base MS-DRG
into severity levels specifies the request is for either one of the
two-way splits (1_23 or 12_3), in response to the specific request, we
will evaluate the criteria for both of the two-way splits,
[[Page 48803]]
however we do not also evaluate the criteria for a three-way split.
In the FY 2023 IPPS/LTCH PPS proposed rule, we stated that using
the September 2021 update of the FY 2021 MedPAR file, we analyzed how
applying the NonCC subgroup criteria to all MS-DRGs currently split
into three severity levels would affect the MS-DRG structure beginning
in FY 2023. We noted that findings from our analysis indicated that
approximately 41 MS-DRGs would be subject to change based on the three-
way severity level split criterion finalized in FY 2021. Specifically,
we found that applying the NonCC subgroup criteria to all MS-DRGs
currently split into three severity levels would result in the deletion
of 123 MS-DRGs (41 MS-DRGs x 3 severity levels = 123) and the creation
of 75 new MS-DRGs. We further noted that these updates would also
involve a redistribution of cases, which would impact the relative
weights, and, thus, the payment rates proposed for particular types of
cases. We referred the reader to Table 6P.1b associated with the
proposed rule for the list of the 123 MS-DRGs that would be subject to
deletion and the list of the 75 new MS-DRGs that would be proposed for
creation for FY 2023 under this policy if the NonCC subgroup criteria
were applied.
We stated in the proposed rule that in light of the ongoing public
health emergency (PHE), we continue to have concerns about the impact
of implementing this volume of MS-DRG changes at this time, and believe
it may be appropriate to continue to delay application of the NonCC
subgroup criteria to existing MS-DRGs to maintain more stability in the
current MS-DRG structure and until such time additional analyses can be
performed to assess impacts, as discussed in response to comments in
the FY 2022 IPPS/LTCH PPS final rule. Therefore, we proposed to delay
application of the NonCC subgroup criteria to existing MS-DRGs with a
three-way severity level split for FY 2023, and to instead maintain the
current structure of the 41 MS-DRGs that currently have a three-way
severity level split (total of 123 MS-DRGs) that would otherwise be
subject to these criteria. We stated that we intend to address the
application of the NonCC subgroup criteria to existing MS-DRGs with a
three-way severity level split in future rulemaking.
Comment: Commenters expressed overwhelming support for our proposal
to delay application of the NonCC subgroup criteria to existing MS-DRGs
with a three-way severity level split for FY 2023 and to maintain the
current structure of the MS-DRGs. A few commenters who agreed with the
proposal to delay the application of the NonCC subgroup criteria also
requested that CMS provide interested parties with an opportunity to
review and comment on impacts to the relative weights before a proposal
is finalized. The commenters stated it would be helpful if CMS made
claims data available, including volumes by MS-DRG, that support the
proposal to reduce the 123 MS-DRGs.
Response: We thank the commenters for their support. In response to
the commenters who requested the opportunity to review and comment on
impacts to the relative weights before a proposal is finalized, we
intend to provide a comprehensive analysis in future rulemaking based
on the comments and feedback we have received. We are providing the
claims data from the September 2021 update of the FY 2021 MedPAR file
that was reviewed for FY 2023 in our analyses of how applying the NonCC
subgroup criteria to all MS-DRGs currently split into three severity
levels would have potentially affected the MS-DRG structure beginning
in FY 2023. We refer the reader to Table 6P.1b associated with this
final rule and available via the internet on the CMS website at <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS</a>.
Comment: A commenter who strongly agreed with the proposal to delay
the application of the NonCC subgroup criteria stated that in addition
to providing a detailed explanation and impact files in the future,
that CMS should consider clarifying and addressing the following
issues: why the list of MS-DRGs that were proposed to be removed in FY
2022 is not the same list of MS-DRGs proposed to be removed for FY
2023, why the list of MS-DRGs that were proposed to become a single,
base MS-DRG for FY 2022 now appear to meet the criteria for a three-way
severity level split for FY 2023, and why MS-DRGs proposed to maintain
a three-way severity level split for FY 2022 now appear to meet the
criteria for a two-way or three-way severity level split for FY 2023.
This commenter also stated that the MS-DRGs displayed in Table 6P.1b
associated with the proposed rule include a list of MS-DRGs that would
be subject to deletion and a list of MS-DRGs that would be proposed for
creation with XXX for the numbers. According to the commenter, many of
the listed MS-DRGs have the same narrative description, however, it
appears they would obtain a new MS-DRG number. The commenter questioned
why MS-DRGs with the same description would have new MS-DRG numbers
assigned. This commenter also suggested that CMS consider patient case-
mix with regard to volumes, and stated Medicare would not have the
volume for the obstetric related MS-DRGs. The commenter requested that
CMS also examine the impact of maternal health quality initiatives and
maternity hospital designation in connection with the solicitation for
comments on low volume MS-DRGs. Lastly, the commenter recommended that
CMS utilize two years of good data to examine the impact of the
proposed redistribution in future analyses and determine if the
proposed MS-DRG changes and associated relative weights appropriately
reflect resource consumption.
Response: We appreciate the commenter's feedback. We acknowledge
that the list of MS-DRGs identified as potentially subject to removal
for FY 2022 differs from the list of MS-DRGs identified as potentially
subject to removal and provided for FY 2023 in connection with the
NonCC subgroup criteria discussion. We also acknowledge that the list
of MS-DRGs identified as potentially subject to creation for FY 2022
differs from the list of MS-DRGs identified as potentially subject to
removal and provided for FY 2023 in connection with the NonCC subgroup
criteria discussion. The lists differ as a result of the claims data
that was analyzed for our MS-DRG analysis and rulemaking each fiscal
year. We provided the results of both the FY 2019 and FY 2020 MedPAR
claims data as displayed in Table 6P.11 in association with the FY 2022
IPPS/LTCH PPS final rule (available via the internet on the CMS website
at <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS</a>).
By comparison, for FY 2023, consistent with our finalized policy to
use the FY 2021 MedPAR data for purposes of this FY 2023 rulemaking, we
have provided the FY 2021 MedPAR claims data for the listed MS-DRGs in
Table 6P.1b in association with this final rule, as noted earlier in
this section. Because there is variation in the claims data reported
from year to year, it is expected that there may be fluctuations in the
data that could affect the list of MS-DRGs potentially subject to
change in connection with the application of the NonCC subgroup
criteria for a particular fiscal year. However, we believe that
reliability and stability of the data is an important consideration
with respect to the
[[Page 48804]]
application of the NonCC subgroup criteria and will give careful
consideration to the number of years of data to analyze in connection
with any future proposed policy changes as well as the impacts on
relative weights, as we continue to assess all the comments and
feedback we have received, particularly in light of the ongoing public
health emergency. We also take this opportunity to note that the listed
MS-DRGs as displayed in the tables (for both FY 2022 and FY 2023) are
for illustrative purposes as the intent was to show the MS-DRGs that
would potentially be subject to deletion and the MS-DRGs that would
potentially be subject to creation if the NonCC subgroup criteria were
to be applied for the applicable fiscal year. Because we did not
propose the application of these criteria to existing MS-DRGs with a
three-way severity level split for either FY 2022 or FY 2023, and we
have not yet completed the comprehensive impact analysis of any such
future proposed changes, as previously discussed, we are clarifying
that both the MS-DRG numbers and MS-DRG titles that may eventually be
subject to change in connection with a future proposal to apply the
NonCC subgroup criteria may, in the interim, be subject to further
modifications as a result of our annual review of the MS-DRG
classifications. As such, any future proposed MS-DRG changes will be
considered in connection with the analysis that is performed for
application of the MCC, CC and NonCC subgroup criteria to the MS-DRGs
that are in effect at that time.
In response to the commenter's question regarding why new MS-DRG
numbers would be considered, we note that new MS-DRG numbers are
preferred because we anticipate that individuals, payers, and
organizations conducting analysis would need to be aware if proposed
changes to base DRG concepts are made to allow them time to adjust
their programs, analyses, or queries that may have hard coded the DRG
numbers. Other agencies that utilize MS-DRGs may perform minimal
updates to their relative weights, quality risk adjustment or exclusion
criteria and only focus on new MS-DRGs, thereby potentially creating
additional operational or system challenges if an existing MS-DRG
number were to be reused. To minimize confusion for those who rely on
MS-DRG concepts year to year, and avoid unintended consequences from
the reuse of an existing DRG number for a different concept, we believe
it is appropriate to consider revisions to both the MS-DRG number and
corresponding description.
Comment: Other commenters requested CMS consider continuing the
delay beyond the period of the public health emergency (PHE). The
commenters indicated that hospital claims and cost report data impacted
by the COVID-19 pandemic should not be used as the basis of MS-DRG
consolidation since utilization may be artificially low during the PHE.
Response: We thank the commenters for their feedback. As stated
earlier in this section, we are giving careful consideration to all the
recommendations and suggestions we have received in connection with the
NonCC subgroup criteria discussion.
Comment: Another commenter expressed concern with regard to how the
NonCC subgroup criteria are to be applied. The commenter stated they
understood the policy to mean that the NonCC subgroup criteria would
only be applied to new requests for MS-DRG splits, not to existing MS-
DRGs. The commenter also stated they were unclear when the proposal was
finalized since, according to the commenter, CMS would have needed to
specify the intent to apply the NonCC subgroup criteria to all existing
MS-DRGs versus only for the creation of new MS-DRGs. Additionally, this
commenter urged CMS to conduct a full analysis that demonstrates the
explanatory power of the proposed new MS-DRGs is an improvement over
the current MS-DRGs, similar to the analysis that was performed for the
transition from CMS DRGs to MS-DRGs in FY 2008. The commenter indicated
that a comprehensive analysis is critical for interested parties to
provide meaningful comments.
Response: In the FY 2022 IPPS/LTCH PPS final rule (86 FR 44796), we
summarized the discussion pertaining to the NonCC subgroup criteria
policy finalized for FY 2021. In that discussion we noted that the
application of the NonCC subgroup criteria going forward may result in
modifications to certain MS-DRGs that are currently split into three
severity levels and result in MS-DRGs that are split into two severity
levels. We stated that any proposed modifications to the MS-DRGs would
be addressed in future rulemaking consistent with our annual process
and reflected in Table 5--Proposed List of Medicare Severity Diagnosis
Related Groups (MS-DRGs), Relative Weighting Factors, and Geometric and
Arithmetic Mean Length of Stay for the applicable fiscal year. As
discussed in the proposed rule, we applied the nonCC subgroup criteria
to each of the MCC, CC, and NonCC subgroups, in our analysis of the MS-
DRG classification requests for FY 2023 that we received by November 1,
2021, as well as any additional analyses that were conducted in
connection with those requests. We also note that new requests to
subdivide a MS-DRG frequently pertain to existing MS-DRGs which differs
from requests to create a new base MS-DRG for which the criteria to
create subgroups is subsequently applied. In response to the
commenter's recommendation that CMS conduct a full analysis similar to
the analysis that was performed for the transition from CMS DRGs to MS-
DRGs in FY 2008, we appreciate the commenter's suggestion and will take
it under advisement.
Comment: Another commenter who recognized differences between the
list of MS-DRGs shown for FY 2022 and FY 2023 requested additional
transparency for the data being presented for review and for CMS to
consider analyzing data from other databases, such as Medicaid or
States, to supplement the MS-DRGs known to have lower volumes among the
Medicare population (for example, Obstetric MS-DRGs). This commenter
also expressed concern about the potential impact to community
hospitals if proposed MS-DRG changes in connection with the NonCC
subgroup criteria result in significant MS-DRG redistribution.
Response: We thank the commenter for their feedback. As discussed
previously, we intend to conduct a comprehensive analysis of the
application of the NonCC subgroup criteria that would be made publicly
available for review and comment in connection with any proposed MS-DRG
changes for future rulemaking.
After consideration of the public comments we received, we are
finalizing our proposal to delay the application of the NonCC subgroup
criteria to existing MS-DRGs with a three-way severity level split
until FY 2024 or later, and are finalizing for FY 2023 to maintain the
current structure of the 41 MS-DRGs that currently have a three-way
severity level split.
We are making the FY 2023 ICD-10 MS-DRG GROUPER and Medicare Code
Editor (MCE) Software Version 40, the ICD-10 MS-DRG Definitions Manual
files Version 40 and the Definitions of Medicare Code Edits Manual
Version 40 available to the public on our CMS website at: <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software</a>.
[[Page 48805]]
2. Pre-MDC: MS-DRG 018 Chimeric Antigen Receptor (CAR) T-cell and Other
Immunotherapies
In the FY 2022 IPPS/LTCH PPS final rule (86 FR 44798 through
44806), we finalized our proposal to assign procedure codes describing
CAR T-cell, non-CAR T-cell, and other immunotherapies to Pre-MDC MS-DRG
018 and to revise the title for Pre-MDC MS-DRG 018 to ``Chimeric
Antigen Receptor (CAR) T-cell and Other Immunotherapies'' to reflect
this assignment. In that discussion, we noted that a few commenters
recommended we continue to work with interested parties on ways to
improve the predictability and stability of hospital payments for these
complex, novel cell therapies and that we should continue to monitor
and assess the appropriateness of therapies assigned to MS-DRG 018, if
they continue to be aligned on resource use, and whether additional
refinements or MS-DRGs may be warranted in the future.
We also noted that the process of code creation and proposed
assignment to the most appropriate MS-DRG exists independently,
regardless of whether there is an associated application for a new
technology add-on payment for a product or technology submitted for
consideration in a given fiscal year. Specifically, requests for a new
code(s) or updates to existing codes are addressed through the ICD-10
Coordination and Maintenance Committee meetings, held annually in the
spring and fall, where code proposals are presented and the public is
provided the opportunity to comment. All codes finalized from the fall
meeting are subsequently proposed for assignment under the ICD-10 MS-
DRGs through rulemaking. We refer the reader to section II.D.17 of the
preamble of this final rule for additional information regarding the
ICD-10 Coordination and Maintenance Committee meeting process.
As stated in the FY 2023 IPPS/LTCH PPS proposed rule (87 FR 28130),
there were no requests or proposals for new procedure codes to describe
the administration of a CAR T-cell or another type of gene or cellular
therapy discussed at the September 14-15, 2021 ICD-10 Coordination and
Maintenance Committee meeting. For the March 8-9, 2022 ICD-10
Coordination and Maintenance Committee meeting, there were topics
included on the agenda and in the related meeting materials that
included proposals for new procedure codes to describe the
administration of a CAR T-cell or another type of gene or cellular
therapy product. The agenda and related meeting materials for these
specific topics are available via the internet on the CMS website at:
<a href="https://www.cms.gov/Medicare/Coding/ICD10/C-and-M-Meeting-Materials">https://www.cms.gov/Medicare/Coding/ICD10/C-and-M-Meeting-Materials</a>.
As stated in the FY 2022 IPPS/LTCH PPS final rule (86 FR 44805) and
noted previously, the process of code creation and proposed assignment
to the most appropriate MS-DRG exists independently, regardless of
whether there is an associated application for a new technology add-on
payment for a product or technology submitted for consideration in a
given fiscal year. We also clarified that the assignment of a procedure
code to a MS-DRG is not dependent upon a product's FDA approval.
Similarly, the creation of a code to describe a technology that is
utilized in the performance of a procedure or service does not require
FDA approval of the technology.
Because the diagnosis and procedure code proposals that are
presented at the March meeting for an October 1 implementation
(upcoming FY) are not finalized in time to include in Table 6A.--New
Diagnosis Codes and Table 6B.--New Procedure Codes in association with
the proposed rule, as noted in prior rulemaking, we use our established
process to examine the MS-DRG assignment for the predecessor codes to
determine the most appropriate MS-DRG assignment. Specifically, we
review the predecessor code and MS-DRG assignment most closely
associated with the new procedure code, and in the absence of claims
data, we consider other factors that may be relevant to the MS-DRG
assignment, including the severity of illness, treatment difficulty,
complexity of service and the resources utilized in the diagnosis or
treatment of the condition. We have noted in prior rulemaking that this
process does not automatically result in the new procedure code being
assigned to the same MS-DRG or to have the same designation (O.R.
versus Non-O.R.) as the predecessor code.
As stated in the FY 2023 IPPS/LTCH PPS proposed rule (87 FR 28130),
in response to commenters' recommendation that we continue to assess
the appropriateness of the therapies assigned to Pre-MDC MS-DRG 018, we
provided the results of our data analysis using the September 2021
update of the FY 2021 MedPAR file for cases reporting the
administration of a CAR T-cell or other immunotherapy in Pre-MDC MS-DRG
018 and the number of cases reporting a secondary diagnosis of Z00.6
(Encounter for examination for normal comparison and control in
clinical research program). We noted that if a procedure code that is
assigned to the logic for Pre-MDC MS-DRG 018 is not listed it is
because there were no cases found. We also noted there were no cases
reporting diagnosis code Z00.6 as a principal diagnosis. Our findings
are shown in the following table.
[[Page 48806]]
[GRAPHIC] [TIFF OMITTED] TR10AU22.006
The data show that there is a wide range in the volume of cases (4
cases versus 435 cases), average length of stay (11.3 days versus 20.3
days), and average costs ($157,950 versus $310,561) reporting the
administration of CAR T-cell therapies in MS-DRG 018. This is to be
expected since these therapies continue to evolve and the ICD-10-PCS
coding to identify and describe these therapies also continues to be
refined through the ICD-10 Coordination and Maintenance Committee
meeting process. As additional claims data becomes available for these
therapies, we will continue to evaluate to determine if further
modifications to Pre-MDC MS-DRG 018 are warranted.
We noted in the proposed rule that in response to our statement in
the FY 2022 IPPS/LTCH PPS final rule that we plan to continue engaging
with interested parties on additional options for consideration in this
field of cellular and gene therapies, we received additional feedback
and suggestions, including recommendations for Town Hall meetings/
listening sessions to discuss the interconnectedness of these issues;
exploration of what was described as a different set and kind of MS-
DRGs that would reward providers for controlling patient care costs,
without consideration of product costs outside of their control; and
evaluation of the creation and assignment of multiple MS-DRGs for cell
and gene therapy cases: one to cover patient care costs, the other to
cover product costs across therapeutic product categories.
We stated we appreciated this additional feedback and will continue
to consider these issues and suggestions in connection with future
rulemaking. We also stated we intend to continue engaging with
interested parties by sharing updates from our analysis of claims data
as we examine and explore potential refinements for these therapies
under the IPPS.
Comment: Several commenters expressed support and appreciation that
for FY 2023, CMS proposed to maintain the current structure of Pre-MDC
MS-DRG 018 that includes ``Other Immunotherapies'', and to maintain its
current methodology used to determine the relative weight. Some
commenters acknowledged that it is difficult to predict what the
associated costs will be in the future for CAR T-cell and other
immunotherapies that remain under development. These commenters urged
CMS to consider factors such as new or different side effects and how
other therapeutic agents that could be administered simultaneously in
connection with these therapies may potentially lead to toxicity, as
continued monitoring of resource utilization and data analysis for Pre-
MDC MS-DRG 018 occurs. Other commenters commended CMS for its
commitment to engage with interested parties as the agency continues to
analyze claims data and consider the feedback that has been received to
date for these therapies.
Response: We thank the commenters for their support and appreciate
the additional feedback on other factors to consider as we continue to
monitor and analyze the data for Pre-MDC MS-DRG 018. As noted in prior
rulemaking, we have received several suggestions, recommendations, and
options pertaining to how CAR T-cell and other immunotherapies may be
classified under the IPPS in the future. We intend to further examine
the feedback received and maintain transparency in our approach moving
forward, with the shared goal of enabling continued access to these and
other vital treatments for Medicare beneficiaries.
Comment: Similar to the public comments received in response to the
FY 2022 IPPS/LTCH PPS proposed rule, for FY 2023, some commenters again
expressed concerns with the non-CAR T-cell therapies and other
immunotherapies that may be assigned to Pre-MDC MS-DRG 018 and stated
that these potential assignments could lead to fluctuations in the
relative weight. A few commenters requested that Pre-MDC MS-DRG 018 be
limited to CAR T-cell therapies. Other commenters encouraged CMS to
clarify its methodology and criteria for assigning new procedure codes
to Pre-MDC MS-DRG 018. Some commenters expressed continued concern with
the revision to the title for Pre-MDC MS-DRG 018 that was finalized
effective FY
[[Page 48807]]
2022 to include ``Other Immunotherapies''.
Response: In the FY 2022 IPPS/LTCH PPS final rule (86 FR 44798
through 44806), we provided detailed summaries and responses to these
same or similar concerns and comments. In the FY 2023 IPPS/LTCH PPS
proposed rule (87 FR 28129 through 28131), we provided an overview of
the assignment of new procedure codes to Pre-MDC MS-DRG 018 and
reiterated much of the discussion from FY 2022 rulemaking. As stated in
prior rulemaking, the MS-DRG system is a system of averages and it is
expected that within the diagnostic related groups, some cases may
demonstrate higher than average costs, while other cases may
demonstrate lower than average costs. We have not made any changes to
our established processes or methodologies for MS-DRG assignment of new
procedure codes, including with regard to case assignment to Pre-MDC
MS-DRG 018, and we refer the reader to the detailed discussion related
to Pre-MDC MS-DRG 018 in the FY 2022 IPPS/LTCH PPS final rule. We note
that additional claims data is needed to fully analyze and consider all
the recommendations we have received, and to potentially develop
alternative proposals with respect to payment for these therapies under
the IPPS. There is also uncertainty with regard to the number and types
of therapies currently under development or undergoing studies and how
soon they will be available. We recognize the concerns that have been
expressed by commenters and we are also continuing to assess the
reliability and stability of the data in light of the ongoing public
health emergency.
Comment: Many commenters expressed appreciation to CMS for
providing transparency with the cases reporting the administration of a
CAR T-cell or other immunotherapy in the FY 2021 MedPAR claims data for
Pre-MDC MS-DRG 018. However, a commenter indicated there was confusion
about the coded claims data as presented in the proposed rule since the
procedure codes described as new technology group 7 became effective
October 1, 2021 (FY 2022), which is one year later than the FY 2021
data that was shown in the table in the preamble of the proposed rule.
The commenter requested that CMS provide clarification to help
eliminate any additional confusion for readers and interested parties
who also analyze the data for these therapies.
Response: We thank the commenters for their support. The FY 2021
MedPAR claims data were regrouped using the proposed FY 2023 MS-DRG
classifications, therefore, coded claims data for the procedure codes
describing the administration of CAR T-cell and other immunotherapy
agents reported in FY 2021 was mapped from the FY 2021 MedPAR coded
claims data to the procedure codes that are effective for FY 2023.
Specifically, the codes that were effective for FY 2021 and are no
longer valid were mapped to the new procedure codes that are valid for
FY 2023. We also note, as generally stated in the preamble of the
proposed rule each year, the diagnosis and procedure codes from the
specified FY MedPAR claims data are grouped through the applicable
version of the proposed FY GROUPER. For example, as discussed in
section II.E.1. of the preamble of the proposed rule (87 FR 28197), the
proposed FY 2023 relative weights are based on the ICD-10-CM diagnosis
codes and ICD-10-PCS procedure codes from the FY 2021 MedPAR claims
data, grouped through the ICD-10 version of the proposed FY 2023
GROUPER (Version 40).
Comment: A commenter suggested that CMS consider establishing a
timeframe that would enable the public to comment on procedure codes
that may be assigned to Pre-MDC MS-DRG 018 upon being approved and
finalized after the spring ICD-10 Coordination and Maintenance
Committee meeting. The commenter stated that currently, because
procedure codes that are discussed at the spring ICD-10 Coordination &
Maintenance (C&M) Committee meeting do not receive proposed assignments
and are not published with the IPPS proposed rule given the timing,
there is no opportunity for interested parties to provide feedback to
CMS about MS-DRG assignments for new codes, including assignment to MS-
DRG-018. The commenter acknowledged the C&M meeting is not the
appropriate forum for the public to provide input on MS-DRG assignment,
however, because Pre-MDC MS-DRG 018 currently has a limited number of
procedure codes assigned to it, the commenter stated that interested
parties should have the opportunity to review and comment on potential
assignment to Pre-MDC MS-DRG 018. This commenter also maintained that
it has a unique relationship with the therapies currently assigned to
Pre-MDC MS-DRG 018 as its membership is the predominant specialty
society associated with these therapies and has the experience and
clinical understanding related to resource utilization associated with
the administration of these therapies.
Response: We appreciate the commenter's feedback. As discussed
elsewhere in this rule as well as in prior rulemaking, because the
procedure code proposals discussed at the Spring ICD-10 Coordination
and Maintenance Committee meeting are not finalized in time to include
in Table 6B.--New Procedure codes associated with the proposed rule,
CMS uses an established process to determine the most appropriate MS-
DRG assignment for these new procedure codes for the upcoming fiscal
year. While we understand and acknowledge the uniqueness of CAR T-cell,
gene, and cellular therapies, we believe it is necessary to further
examine how and when we could alter our current methodology and
timelines to provide the opportunity for interested parties to submit
comments and feedback in the assignment of new procedure codes that are
finalized after the spring meeting. We also note, as discussed in the
proposed rule (87 FR 28130), all codes finalized from the fall meeting
are subsequently proposed for assignment under the ICD-10 MS-DRGs
through rulemaking, therefore, interested parties seeking the
opportunity to more fully comment on potential MS-DRG assignment(s)
have the opportunity to submit requests for consideration of proposed
new procedure codes in association with these therapies to be discussed
at the fall meeting versus the spring meeting. Alternatively,
interested parties may use current coding information as shown in the
ICD-10 Coordination and Maintenance Committee meeting materials to
consider the potential MS-DRG assignments for any procedure codes that
may be finalized after the March meeting and submit public comments for
consideration.
As noted in the proposed rule, for the March 8-9, 2022 ICD-10
Coordination and Maintenance Committee meeting there were two topics
included on the agenda and in the related meeting materials that
included proposals for new procedure codes to describe the
administration of a CAR T-cell or another type of gene or cellular
therapy product. The two topics are Administration of afamitresgene
autoleucel (afami-cel), a specific peptide enhanced affinity receptor
(SPEAR) T-cell therapy and Administration of Tabelecleucel (tab-
cel[supreg]), an allogeneic Epstein-Barr virus (EBV)-specific T-cell
immunotherapy, both of which were approved for new procedure codes
following the March meeting. We refer the reader to the CMS website at
<a href="https://www.cms.gov/Medicare/Coding/ICD10/C-and-M-Meeting-Materials">https://www.cms.gov/Medicare/Coding/ICD10/C-and-M-Meeting-Materials</a> for
additional detailed information regarding these code requests.
[[Page 48808]]
Because the diagnosis and procedure code proposals that are
presented at the March ICD-10-CM Coordination and Maintenance Committee
meeting for an October 1 implementation (upcoming FY) are not finalized
in time to include in Table 6A.--New Diagnosis Codes and Table 6B.--New
Procedure Codes in association with the proposed rule, as we have noted
in prior rulemaking, we use our established process to examine the MS-
DRG assignment for the predecessor codes to determine the most
appropriate MS-DRG assignment. Specifically, we review the predecessor
code and MS-DRG assignment most closely associated with the new
procedure code, and in the absence of claims data, we consider other
factors that may be relevant to the MS-DRG assignment, including the
severity of illness, treatment difficulty, complexity of service and
the resources utilized in the diagnosis and/or treatment of the
condition. We have noted in prior rulemaking that this process does not
automatically result in the new procedure code being assigned to the
same MS-DRG or to have the same designation (O.R. versus Non-O.R.) as
the predecessor code. As shown in Table 6B.--New Procedure Codes
associated with this final rule and available via the internet on the
CMS website at: <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS</a>, new procedure codes for these two therapies
have been finalized for assignment to Pre-MDC MS-DRG 018 effective with
discharges on and after October 1, 2022 (FY 2023).
We appreciate the public comments we received, and, as noted, will
continue to evaluate the recommendations and options provided by
commenters related to these therapies as well as to monitor the
available claims data.
3. MDC 01 (Diseases and Disorders of the Nervous System)
a. Laser Interstitial Thermal Therapy (LITT)
In the FY 2022 IPPS/LTCH PPS final rule (86 FR 44812 through
44814), we finalized the reassignment of 31 ICD-10-PCS procedure codes
describing laser interstitial thermal therapy (LITT) of various body
parts to more clinically appropriate MS-DRGs, as shown in Table 6P.2b
associated with the FY 2022 IPPS/LTCH PPS final rule and available via
the internet on the CMS website at: <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS</a>, including the
reassignment of procedure codes D0Y0KZZ (Laser interstitial thermal
therapy of brain) and D0Y1KZZ (Laser interstitial thermal therapy of
brain stem), which were reassigned from MS-DRG 023 (Craniotomy with
Major Device Implant or Acute Complex CNS Principal Diagnosis with MCC
or Chemotherapy Implant or Epilepsy with Neurostimulator), MS-DRG 024
(Craniotomy with Major Device Implant or Acute Complex CNS Principal
Diagnosis without MCC), and MS-DRGs 025, 026, and 027 (Craniotomy and
Endovascular Intracranial Procedures with MCC, with CC, and without CC/
MCC, respectively) to MS-DRGs 040, 041, and 042 (Peripheral, Cranial
Nerve and Other Nervous System Procedures with MCC, with CC and without
CC/MCC, respectively).
We also finalized the redesignation of these two LITT procedures
(codes D0Y0KZZ and D0Y1KZZ) and the reassignment from extensive O.R.
procedures in MS-DRGs 981, 982 and 983 (Extensive O.R. Procedure
Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC,
respectively) to non-extensive O.R. procedures in MS-DRGs 987, 989, and
989 (Non-Extensive O.R. Procedure Unrelated to Principal Diagnosis with
MCC, with CC, and without CC/MCC, respectively) (86 FR 44889).
As discussed in the FY 2023 IPPS/LTCH PPS proposed rule (87 FR
28131), for FY 2023, we received two requests from the manufacturers of
the LITT technology (Medtronic and Monteris[supreg] Medical) to reverse
the MS-DRG reassignment for the ICD-10 procedure codes that identify
LITT of the brain and brain stem (codes D0Y0KZZ and D0Y1KZZ) from the
MS-DRGs for peripheral, cranial nerve and other nervous system
procedures (MS-DRGs 040, 041, and 042) back to the MS-DRGs for
craniotomy and endovascular procedures (MS-DRGs 023, 024, 025, 026, and
027). The first requestor acknowledged that the technique utilized in
the performance of LITT procedures for the brain and brain stem are
minimally invasive and do not involve a craniotomy however, the
requestor also stated the procedures assigned to MS-DRGs 025, 026, and
027 are not exclusive to craniotomies. The requestor further stated
that these LITT procedures involve a twist drill or burr hole and are
similar to other non-craniotomy procedures in MS-DRGs 025, 026, and 027
including radioactive elements and neurostimulator leads that involve
inserting these devices into the brain.
In its review of the other procedures assigned to MS-DRGs 040, 041,
and 042, the requestor stated that there are distinct clinical
differences between the invasiveness of LITT that involves
instrumentation being placed deeply within the brain tissue and the
non-invasiveness of stereotactic radiosurgery that does not involve
entering the brain with instrumentation. The requestor also indicated
LITT utilizes a different modality via direct thermal ablation compared
to stereotactic radiosurgery that utilizes externally-generated
ionizing radiation.
The requestor performed its own data analysis for LITT procedures
of the brain and brain stem using MedPAR data from FY 2019 through FY
2022 impact files. According to the requestor, its findings demonstrate
that the costs of the cases reporting LITT of the brain or brain stem
are better aligned with MS-DRGs 025, 026, and 027 compared to MS-DRGs
040, 041, and 042.
The second requestor similarly discussed the steps and resources
involved in the performance of LITT procedures for the brain and brain
stem, provided its detailed analysis on the indications for LITT (brain
tumors and epileptic foci), compared LITT to other procedures in MS-
DRGs 025, 026, and 027 and stated that the majority of the procedures
currently assigned to MS-DRGs 040, 041, 042 are not performed for the
treatment of brain cancer or epilepsy. The requestor stated that the
LITT procedure is on the inpatient only list and is only performed on
Medicare beneficiaries in the inpatient hospital setting. The requestor
provided the top 10 principal diagnoses associated with LITT of brain
cases it found based on its analysis, and identified the diagnoses for
which there were less than 10 cases with an asterisk, as reflected in
the following table.
[[Page 48809]]
[GRAPHIC] [TIFF OMITTED] TR10AU22.007
The requestor asserted that the statement in the FY 2022 IPPS/LTCH
PPS final rule that the technique to perform the LITT procedure on
brain and brain stem structures is considered minimally invasive and
does not involve a craniotomy, and that therefore, continued assignment
to the craniotomy MS-DRGs is not clinically appropriate,
mischaracterizes both the LITT procedures and universe of services
assigned to MS-DRGs 023 through 027. The requestor acknowledged that
the craniotomy procedures listed in the logic for MS-DRGs 023 through
027 include open procedures but stated the logic also lists less
invasive procedures including percutaneous and percutaneous endoscopic
procedures. The requestor asserted that open procedures are a minority
of the ICD-10-PCS codes assigned to these MS-DRGs.
In addition, the requestor stated that LITT and craniotomy are in
fact very clinically similar; in that both procedures are intended to
remove and destroy the targeted tumor and lesion with a different
surgical tool used (scalpel versus heated ablation probe). According to
the requestor, brain LITT procedures involve insertion of laser probes
into the brain which requires opening both the skull and dura, similar
to a craniotomy. The requestor also stated that craniotomy and LITT
share several procedural characteristics and provided the following
list.
<bullet> Require an operating room;
<bullet> Performed under general anesthesia;
<bullet> Require creation of burr holes and invasive skull
fixation;
<bullet> Require a sterile field, incision, opening of the skull
and dura;
<bullet> Cause tissue to be immediately destroyed or excised;
<bullet> Carry a risk of immediate intracranial bleeding;
<bullet> Require closure of the scalp wound;
<bullet> Risk intracranial infection; and
<bullet> Require a hospital stay of one or more nights.
In contrast, the requestor stated that procedures assigned to MS-
DRGs 040, 041, and 042 are primarily nerve procedures or excision or
detachment procedures performed on parts of the body other than the
head, including the upper and lower extremities. According to the
requestor, none of the procedures in MS-DRGs 040, 041, and 042 require
drilling into the patient's skull, a step which is integral to LITT.
The requestor provided the following top 10 principal diagnoses
associated with cases it found in MS-DRGs 040, 041, and 042 during its
analysis and stated that most of the procedures assigned to MS-DRGs
040, 041, and 042 are not typically performed in the treatment of brain
cancer or epilepsy.
[GRAPHIC] [TIFF OMITTED] TR10AU22.008
[[Page 48810]]
However, the requestor stated an exception is stereotactic
radiosurgery (SRS) procedures performed on the brain and brain stem
that are assigned to MS-DRGs 040, 041, and 042 and are used to treat
brain cancer. According to the requestor, craniotomy, LITT and SRS are
all image-guided procedures used to treat a variety of brain disorders
including tumors and epilepsy, although it stated that is where any
similarity between LITT and SRS ends and where the procedural
similarities between craniotomy and LITT begin.
The requestor stated SRS is a non-invasive procedure that gradually
destroys or inactivates tissues in or around the brain and is typically
performed on an outpatient basis while inpatient SRS treatment is rare.
According to the requestor, SRS does not require an operating room, is
rarely done under general anesthesia (children and highly
claustrophobic individuals being an exception), and does not require
(but can use) rigid skull fixation. In addition, the requestor stated
that because it is non-invasive, there is no need for a sterile field,
incision, opening/closing of the skull, opening/closing of the dura,
suturing/stapling the wound, and produces essentially no risk of
immediate intracranial bleeding or delayed infection. According to the
requestor, LITT is much more invasive than SRS using a head frame and
involves and requires the same surgical skill and hospital resources as
craniotomies.
In the proposed rule we noted that following the submission of the
two FY 2023 MS-DRG classification change requests for LITT, these same
two requestors (the manufacturers of the LITT technology) submitted a
joint code proposal requesting an overall change to how LITT is
classified within the ICD-10-PCS classification and for consideration
as an agenda topic to be discussed at the March 8-9, 2022 ICD-10
Coordination and Maintenance Committee meeting. The proposal was
presented and discussed at the March 8-9, 2022 ICD-10 Coordination and
Maintenance Committee meeting. We referred the reader to the CMS
website at: <a href="https://www.cms.gov/Medicare/Coding/ICD10/C-and-M-Meeting-Materials">https://www.cms.gov/Medicare/Coding/ICD10/C-and-M-Meeting-Materials</a> for additional detailed information regarding the request,
including a recording of the discussion and the related meeting
materials. Public comments in response to the code proposal were due by
April 8, 2022.
Because the diagnosis and procedure code proposals that are
presented at the March ICD-10-CM Coordination and Maintenance Committee
meeting for an October 1 implementation (upcoming FY) are not finalized
in time to include in Table 6A. --New Diagnosis Codes and Table 6B.--
New Procedure Codes in association with the proposed rule, as we have
noted in prior rulemaking and discuss further in this section, we use
our established process to examine the MS-DRG assignment for the
predecessor codes to determine the most appropriate MS-DRG assignment.
Specifically, we review the predecessor code and MS-DRG assignment most
closely associated with the new procedure code, and in the absence of
claims data, we consider other factors that may be relevant to the MS-
DRG assignment, including the severity of illness, treatment
difficulty, complexity of service and the resources utilized in the
diagnosis and/or treatment of the condition. We have noted in prior
rulemaking that this process does not automatically result in the new
procedure code being assigned to the same MS-DRG or to have the same
designation (O.R. versus Non-O.R.) as the predecessor code. Under this
established process, the MS-DRG assignment for the upcoming fiscal year
for any new diagnosis or procedure codes finalized after the March
meeting would be reflected in Table 6A.--New Diagnosis Codes and Table
6B.--New Procedure Codes associated with the final rule for that fiscal
year. However, as stated in the proposed rule, in light of the unique
circumstances relating to these procedures, for which there was a
pending proposal to reclassify LITT within ICD-10-PCS and for new
procedure codes discussed at the March meeting, as well as an MS-DRG
reclassification request to reassign the existing codes describing
these procedures, we addressed in this section first, the code proposal
discussed at the March meeting and the possible MS-DRG assignments for
any new codes that may be approved, and then secondly, the requested
reassignment of the existing codes, in the event the new codes are not
approved.
To summarize, as discussed at the March meeting, the code proposal
was to reclassify LITT procedures from the Radiation Therapy section of
ICD-10-PCS (Section D) to the Medical and Surgical section of ICD-10-
PCS. Specifically, the proposal was to reclassify LITT procedures to
the root operation Destruction. In ICD-10-PCS, the root operation
Destruction is defined as physical eradication of all or a portion of a
body part by the direct use of energy, force, or a destructive agent.
According to the requestors, LITT is misclassified to section D-
Radiation Therapy in ICD-10-PCS possibly because of terminology that
was used for predicate devices, whose indications included the phrase
``interstitial irradiation or thermal therapy'' in describing LITT's
method of action. The requestors stated LITT is thermal therapy,
destroying soft tissue using heat generated by a laser probe at the
target site and that the LITT procedure does not use ionizing
radiation, which is what the term ``radiation'' commonly refers to in
the general medical sense. The requestors also stated that by itself,
radiation is a broad term and provided an example that the spectrum of
electromagnetic radiation technically encompasses low energy non-
ionizing radio waves, microwaves, and infrared to high energy ionizing
X-rays and gamma rays while ionizing radiation creates ions in the
cells it passes through by removing electrons, a process which kills or
alters the cells over time.
The requestors further stated that only certain medical uses of
radiation are classified to section D-Radiation Therapy. For instance,
section D-Radiation Therapy categorizes treatments using ionizing
radiation, including beam radiation, brachytherapy, and stereotactic
radiosurgery. All of these deliver concentrated ionizing radiation to
eradicate abnormal cells, most commonly neoplasms. Other treatments
classified to section D-Radiation Therapy, such as hyperthermia, are
used as adjuncts to ionizing radiation. The requestors asserted that
while LITT eradicates abnormal cells, it does so with heat, not
ionizing radiation and rather than a radiation therapy procedure, LITT
is a surgical procedure. According to the requestors, LITT would be
more appropriately classified as an ablation procedure with the root
operation Destruction.
As stated in the proposed rule, the original request for a new
code(s) to describe the LITT technology was initially discussed at the
September 24-25, 2008 ICD-9-CM Coordination and Maintenance Committee
meeting. At that time, the requestor sought an April 1, 2009
implementation date. Public comments opposed an April 1, 2009
implementation date, therefore, effective October 1, 2009 (FY 2010),
ICD-9-CM procedure codes were created to identify procedures performed
utilizing the LITT technology. The following table lists the ICD-9-CM
procedure codes describing LITT and their respective MDC and MS-DRG
assignments under the ICD-9 based MS-DRGs. We refer the reader to the
ICD-9 and ICD-10 MS-DRG Definitions Manual Files V33 (available via the
[[Page 48811]]
internet on the CMS website at: <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Acute-Inpatient-Files-for-Download">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Acute-Inpatient-Files-for-Download</a>-Items/FY2016-Final-Rule-Correction-Notice-Files in the
Downloads section) for complete documentation of the GROUPER logic for
ICD-9.
[GRAPHIC] [TIFF OMITTED] TR10AU22.009
The requestors maintain that although LITT was used to treat a
variety of anatomic sites when it was first introduced, its current
primary use is intracranial, specifically to treat brain tumors and
epileptic foci. However, the requestors stated it is also used to treat
radiation necrosis, an inflammatory response from prior treatment with
ionizing radiation.
We noted in the proposed rule that currently, in the U.S., there
are only two LITT systems in use, Visualase<SUP>TM</SUP> MRI-Guided
Laser Ablation (Medtronic) and the Neuroblate[supreg] System
(Monteris[supreg] Medical). The requestors also stated that over the
last six years, the Indications for Use (IFU) for one of the two U.S.
approved LITT technologies (Neuroblate[supreg]) has been updated to
reflect the system's current use in the brain and to align with the
intended neurosurgical patient population. The requestor indicated
applications in the spine are also anticipated in the future within the
central nervous system.
As previously noted, the deadline for receipt of public comments
for the proposed reclassification of LITT procedures that was presented
at the March 8-9, 2022 ICD-10 Coordination and Maintenance Committee
meeting along with the corresponding proposal for new procedure codes
was April 8, 2022, and the final code decisions on these proposals were
not yet available for inclusion in Table 6B.--New Procedure Codes
associated with the FY 2023 IPPS/LTCH PPS proposed rule. However, as
discussed in prior rulemaking (86 FR 44805), codes that are finalized
after the March meeting are reviewed and subject to our established
process of initially reviewing the predecessor codes MS-DRG assignment
and designation, while considering other relevant factors (for example,
severity of illness, treatment difficulty, complexity of service and
the resources utilized in the diagnosis and/or treatment of the
condition) as previously described. The codes that are finalized after
the March meeting are specifically identified with a footnote in Tables
6A.--New Diagnosis Codes and Table 6B.--New Procedure Codes that are
made publicly available in association with the final rule via the
internet on the CMS website at https://www.cms.gov/medicare/medicare-
fee-for-service-payment/acuteinpatientpps. The public may provide
feedback on these finalized assignments, which is then taken into
consideration for the following fiscal year.
We stated in the proposed rule that the MS-DRG assignment for any
new procedure codes describing LITT, if finalized following the March
meeting, would be reflected in Table 6B.--New Procedure Codes
associated with the final rule for FY 2023. However, in light of the
unique circumstances with respect to these procedures, for which there
was both a proposal for reclassifying LITT from the Radiation Therapy
section of the procedure code classification to the Medical/Surgical
section with new ICD-10-PCS procedure code(s) and a separate MS-DRG
reclassification request on the existing procedure codes, we provided
the opportunity for public comment on possible MS-DRG assignments for
the requested new procedure codes describing LITT that may apply based
on the application of our established process and analysis, in the
event the new codes were finalized for FY 2023. We also noted that
while we discussed the potential MS-DRG assignments for new procedure
codes describing LITT, interested parties may use current coding
information to consider the potential MS-DRG assignments for any other
procedure codes that may be finalized after the March meeting and
submit public comments for consideration. Specifically, in the ICD-10
Coordination and Maintenance Committee meeting materials (available via
the internet on the CMS website at: <a href="https://www.cms.gov/Medicare/Coding/ICD10/C-and-M-Meeting-Materials">https://www.cms.gov/Medicare/Coding/ICD10/C-and-M-Meeting-Materials</a>), for each procedure code
proposal we provide the current coding that is applicable within the
classification and that should be reported in the absence of a more
unique code, or until such time a new code is created and becomes
effective. The procedure code(s) listed in current coding are
generally, but not always, the same code(s) that are considered as the
predecessor code(s) for purposes of MS-DRG assignment. As previously
noted, our process for determining the MS-DRG assignment for a new
procedure code does not automatically result in the new procedure code
being assigned to the
[[Page 48812]]
same MS-DRG or having the same designation (O.R. versus Non-O.R.) as
the predecessor code. However, this current coding information can be
used in conjunction with the GROUPER logic, as set forth in the ICD-10
MS-DRG Definitions Manual and publicly available via the internet on
our CMS website at: <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software</a>
to review the MS-DRG assignment of the current code(s) and examine the
potential MS-DRG assignment of the proposed code(s), to assist in
formulating any public comments for submission to CMS for
consideration.
We noted in the proposed rule that, unlike the typical code request
for a new or revised procedure code that involves a new technology or a
new approach to performing an existing procedure, the circumstances for
this particular request are distinct in that the code request would
reclassify LITT within the ICD-10-PCS classification from section D--
Radiation Therapy to the root operation Destruction in the Medical and
Surgical section of ICD-10-PCS. Therefore, in light of the unique
considerations with respect to the requested reclassification of the
LITT procedures in connection with the pending code proposal, we stated
we believe it was appropriate to utilize the assignments and
designations of the procedure codes describing Destruction of the
respective anatomic body site as predecessor codes rather than the
current codes describing LITT from the Radiation Therapy section of
ICD-10-PCS in considering potential MS-DRG assignment for the requested
new LITT procedure codes.
As previously discussed, under our established process for
determining the MS-DRG assignment for newly approved procedure codes,
we examine the MS-DRG assignment for the predecessor codes to determine
the most appropriate MS-DRG assignment for the new codes. Specifically,
we review the predecessor code and MS-DRG assignment most closely
associated with the new procedure code, and in the absence of claims
data, we consider other factors that may be relevant to the MS-DRG
assignment, including the severity of illness, treatment difficulty,
complexity of service and the resources utilized in the diagnosis and/
or treatment of the condition. As we have noted in prior rulemaking,
this process does not automatically result in the new procedure code
being assigned to the same MS-DRG or to have the same designation (O.R.
versus Non-O.R.) as the predecessor code.
Applying this established review process to the proposed codes for
the LITT procedures, we stated we believe that, based on the
predecessor codes, and as previously noted, the potential assignments
and designations would align with the assignments and designations of
the procedure codes describing Destruction of the respective anatomic
body site. For example, as discussed in the preamble of the proposed
rule and earlier in this section of this final rule, the code request
involved reclassifying LITT procedures from section D--Radiation
Therapy to the root operation Destruction in the Medical and Surgical
section of ICD-10-PCS. The root operation Destruction is appropriate to
identify and report procedures, such as ablation, that are performed on
various body parts. The code request also involved creating what is
referred to as a qualifier value, to uniquely describe LITT as the
modality. The qualifier value is the seventh character or digit, in a
valid ICD-10-PCS procedure code.
We presented the following ICD-10-PCS table in the proposed rule,
which illustrates an example of the proposed procedure codes for LITT
of the brain and brain stem, and cervical, thoracic, and lumbar spinal
cord body parts, including the qualifier value that was presented and
discussed at the March 8-9, 2022 ICD-10 Coordination and Maintenance
Committee meeting.
[GRAPHIC] [TIFF OMITTED] TR10AU22.010
We noted in the proposed rule that the code proposal presented only
provided the body part value 0 Brain, for reporting any LITT procedures
performed on the brain, as well as, the brain stem, consistent with the
current available body part option in Table 005, Destruction of Central
Nervous System and Cranial Nerves, where the predecessor code is
located. We also noted that the predecessor code(s) and associated MS-
DRG assignments for the proposed new procedure code(s) describing LITT
of the brain and spinal cord under MDC 01 are identified as follows.
[[Page 48813]]
[GRAPHIC] [TIFF OMITTED] TR10AU22.011
As shown in the table, the procedure codes describing destruction
of brain with an open, percutaneous or percutaneous endoscopic approach
are assigned to MS-DRGs 023 through 027 (craniotomy and endovascular
procedures) and the procedure codes describing destruction of cervical,
thoracic or lumbar spinal cord with an open, percutaneous or
percutaneous endoscopic approach are assigned to MS-DRG 028 (Spinal
Procedures with MCC), MS-DRG 029 (Spinal Procedures with CC or Spinal
Neurostimulators), and MS-DRG 030 (Spinal Procedures without CC/MCC).
We referred the reader to Table 6P.2a associated with the proposed
rule (and available via the internet at: https://www.cms.gov/medicare/
medicare-fee-for-service-payment/acuteinpatientpps)
[…truncated; see source link]Indexed from Federal Register on August 10, 2022.
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